How Tanzania can gain from trade ties with SA

Friday May 12 2017

President John Magufuli with his South African

President John Magufuli with his South African counterpart, Mr Jacob Zuma, at State House, Dar es Salaam, yesterday 

By By Rosemary Mirondo rmirondo@tz.nationmedia.co

 Creating strategies to acquire expertise, technological know-how and forming beneficial joint ventures is the best way local businesses can benefit from the trade partnership between Tanzania and South Africa, stakeholders have said.

Reacting to South African President Jacob Zuma’s visit to Tanzania that focused on trade and investment issues businesspeople and analysts told The Citizen in separate interviews that the relationship is vital especially taking into consideration that Tanzania is the only East African Community member state that also belongs to the Southern African Development Community (SADC) bloc.

Yesterday, President John Magufuli and President Zuma signed three cooperation agreements including on biodiversity conservation, management, transport and the binational commission between the two countries.

But investment centres from both countries have also agreed to work together to coordinate inflows between the two countries.

The chairman of the CEO Roundtable of Tanzania and founder of Infotech Investment Group Ltd, Mr Ali Mufuruki, is one of the Tanzania’s businessmen who has entered into successful partnership with South Africans. In 1999 he finalized a deal with Woolworths and the business has since thrived to a point the Tanzanian franchise has expanded to Kampala, Uganda.

According to him, South African investors are significant stakeholders in the development of Tanzania’s private sector and that local businesspeople should take advantage of the available trade and investments arrangements such as double taxation treaties to export to that country.

The fact that South Africans have advanced in technology and industrialization should also be a reason enough to do business with them.

“The removal of visa requirements between the two countries is one big step that has increased visits of businessmen to and from both countries,” he said adding; “There is a huge market in South Africa, which is not fully utilized by our businesspeople, who either opt to go to China and other countries for their goods,” he said.

The East African Business Council chairman Mr Felix Mosha said that South Africa is among the African top three huge investors in Tanzania and therefore with the business delegation visit it was imperative to expand existing investments and also attract more.

“It is vital that both the Tanzania and South African business community use the opportunity to identify areas that it can work together in joint investments which are more advantageous for the country,” he said.

One of these areas is technology transfer that is much more extensive in South Africa. Available data shows that investors from South Africa have invested in about 225 projects in Tanzania with a value of $803.15 million in various sectors of the economy, employing 20,916 people. South Africa is also the third-largest exporter to Tanzania, with a market share of 9.63 per cent.

Trade volumes between Tanzania and South Africa have increased from $900 million in 2007 to $2.4 billion last year.

But the trade deficit between the two countries is too high in favour of South Africa. For example while South Africa’s exports to Tanzania were $500-million in 2009, South Africa’s imports from Tanzania were $22 million in 2009 and grew to $44 million in 2010.

Among some of the investments include, Tanzania Breweries Limited (TBL), National Bank of Commerce (NBC), Anglo Gold Ashanti through Geita Gold Mine, Game Supermarkets and Shoprite. Investors from the rainbow nation have also invested in hospitality and tourism sectors, construction and real estate.

Meanwhile, Tanzania Association of Tour Operators CEO Mr Sirili Akko has said the two countries are competitors in the tourism business but they need to find ways of working cooperation and joint investments.

“We have more tourist attractions but they have expertise and know-how that is vital for business,” he said.

Trade and economic relations between the two countries started more than two decades ago, soon after the majority rule in South Africa. But the relations were characterized by grievances, especially from the fact that Tanzania did not much benefit. Can the new vigour in trade relations produce beneficial results?

The Tanzania Private Sector Foundation (TPSF) director Mr Godfrey Simbeye thinks that it can.

“With [President Magufuli]’s government I think Tanzania will now benefit. We are assured of the commitment and the support from the government. And we hope and expect that the most probale areas of cooperation will be in the sectors of manufacturing and agriculture and energy,” he said.

On his part Honest Ngowi an economist from Mzumbe University said that the South African delegation is an opportunity that should be explored fully and evaluated on how the country benefited from the visit.

“South Africa are leading investors in aviation, tourism and trade and we should explore fully their potential…we even send our people to South Africa for treatment apart from India, a fact that is very clear that we need to learn from them,” he said.

One of the activities during President Zuma’s visit yesterday included the operationalization and launch of the South Africa- Tanzania Bi National Commission (BNC) which is useful for deepening existing bilateral economic and trade relations. Ends

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