KEYNOTE ADDRESS BY H. E. JAKAYA MRISHO KIKWETE, PRESIDENT OF THE UNITED REPUBLIC OF TANZANIA DURING THE TANZANIA – OMAN BUSINESS FORUM, MUSCAT, OMAN 16th OCTOBER, 2012 H.E. Khalil Al Khonji, Chairman, Oman Chamber of Commerce and Industry; Eng. Aloys J. Mwamanga, President, Tanzania Chamber of Commerce, Industry and Agriculture; Ms. Munira Humoud Said, President, Zanzibar Chamber of Commerce, Industry and Agriculture; Honorable Ministers; Distinguished Businessmen and Women; Invited Guests; Ladies and Gentlemen; I thank you Mr. Khalil Al Khonji, Chairman of the Oman Chamber of Commerce and Industry for inviting me to attend and speak at the historic first, Tanzania – Oman Business Forum. I thank the Oman Chamber of Commerce and Industry and the Tanzania Embassy for conceiving the idea of holding this important meeting and organizing it so well. I am visiting the Sultanate of Oman, at the invitation of His Majesty Sultan Qaboos, to consolidate the longstanding historic social, political and economic relations and cooperation that so happily exists between our two countries and peoples. This, Forum, therefore is a vehicle for promoting and strengthening economic, trading and investment cooperation between our governments and peoples. I wish events of this nature could take place more often and regularly, both here in Oman and back home in Tanzania. Ladies and Gentlemen; The Sultanate of Oman is a very special country to Tanzania. There is no other country on this planet with as many of its citizens who have blood relations with the people of Tanzania. This is a unique asset or resource which our two countries can use to promote stronger political, social and economic ties for the mutual benefit of our two countries and two peoples. I am undertaking this visit and I speak at this Forum this afternoon precisely for that reason. Ladies and Gentlemen; I heartily welcome the holding of this Forum and I look forward with great anticipation to the outcome of this meeting. I hope Oman and Tanzanian business people and the several government officials gathered here this afternoon will rise to the occasion and take our economic relations to the next level. I want to see increased economic, investment and business relations between our two friendly countries become more robust because we both have a lot to offer to each other and much to benefit. Ladies and Gentlemen; Let me start by stating emphatically that Tanzania is a great place to invest and do business. We have worked so hard for over two decades now to put in place a very conducive investment environment. We have opened our doors wide for anyone interested to bring capital and do business with us. We offer a wide range of investment incentives just like several other popular investment destinations in the world. And, in some respect we are even more generous and attractive. I am happy that I have brought with me responsible government officials and some businessmen from both Zanzibar and Tanzania Mainland who will give you detailed information and answer all your questions. Peace, Good Governance and Conducive Business Environment Ladies and Gentlemen; Tanzania is a peaceful and politically stable country. This is a critical asset for one to invest. We are a young vibrant multiparty democracy. We uphold the tenets of good governance, respect of human rights and the rule of law. The fight against corruption and other vices in society is unwavering, despite the daunting challenges we are faced with. Private investments in Tanzania are guaranteed by government policy and law against nationalization and expropriation. Investors are allowed to take their money. They can repatriate profits and dividends without inhibitions. Besides, Tanzania is a signatory and a party to several multilateral and bilateral agreements on protection and promotion of investments. Among such international agreements and memberships, Tanzania is a member of Multilateral Investment Guarantee Agency of the World Bank (MIGA) and the Swiss based International Centre for Settlement of Investment Disputes (ICSID). At the bilateral level, Tanzania has entered into investment promotion and protection agreements with many countries. I am happy that, shortly before my coming here we witnessed the signing of the Agreements on the Promotion and Protection of Investment and the establishment of Joint Business Council between Oman and Tanzania. Surely, these will go a long way towards reducing further the risk of investing in Tanzania and promoting business relations. I hope our two governments will conclude at the earliest possible time, ongoing the negotiations on the avoidance of double taxation. Market-based Economy with Stable Macroeconomic and Fiscal Policy Regime Ladies and Gentlemen; Tanzania espouses market based economic policies. This is very much a function of economic reforms we have been undertaken since the mid-1980s. As you may know, prior to that Tanzania espoused socialist policies. All commanding heights of the economy were in the hands of the state. The state was involved in the production and distribution of goods and services from village to national level. The state also continued to perform the traditional functions of maintaining law and order and, governing with the advent of economic reforms a fundamental policy decision was made. This was about the government doing the primary functions of the state of governing and maintaining law and order, leaving the private sector to do business. Briefly, the new policy could be summarized as follows, let "Government Govern and Private Sector do Business". In pursuit of this new policy the government began to withdraw from direct involvement in production and distribution activities and left them in the hands of the private sector. A comprehensive programme of divestiture of state enterprises followed. Todate, most state enterprises have been privatized except for a few public utilities in the sector of water, electricity, railways, roads, health and education. Even with these sectors, the private sector is allowed direct involvements. The government still owns the state enterprises although in some aspects there is private sector participation. The economic reforms have worked well for the Tanzanian economy despite some challenges. The economy has turned around from the stresses and downward trends before the reform. The macro-economic frame back on track and benefits are being enjoyed. Tanzania today enjoys macro-economic stability. All macro-economic indicators are good and at the seven percent average economic growth rate over the past decade, Tanzania is among the 20 fastest growing economies in the world. Currently, due to high food and oil prices, inflation has been a challenge. However, there are positive signs of decline, from 19.5 percent three months ago to 14.9 percent last month. We hope to get back to single digit by June, 2013. Geographical Location Ladies and Gentlemen; Tanzania is strategically located in the eastern coast of Africa so, come and invest to take advantage of it. Tanzania borders eight countries of Kenya, Uganda, Rwanda, Burundi, Democratic Republic of Congo, Zambia, Malawi and Mozambique. It is a gateway for six landlocked countries Zambia, Malawi, Rwanda, Democratic Republic of Congo, Burundi and Uganda which use Tanzanian ports, roads, railways for their import and export trade. Tanzania is also the gateway for goods to and from Eastern DRC. In this regard, therefore, investments or businesses to cater for the facilitation of imports and exports of these countries present lucrative opportunities. One can invest in lucrative freight related businesses like clearing and forwarding, warehousing, logistic centres, trucking business etc. But there are also opportunities in port development and management, building toll roads, railways, air transportation etc. This location also presents ample opportunities for situating manufacturing and trading businesses in Tanzania. There is almost a captive market to take advantage off. Fortunately, also Tanzania shares regional economic grouping with all these countries. As such, locating your businesses in Tanzania enables you to access the East African Community market of 120 million people which are in Kenya, Uganda, Rwanda and Burundi. You can also access close to 200 million people market of the Southern African Development Community, with the DRC, Zambia, Malawi, Mozambique, Angola, Namibia, South Africa, Zimbabwe, Lesotho, Swaziland, Mauritius, Seychelles and Madagascar. In these two economic groupings there is free movement of goods and services. There is discussion going on between East African Community, SADC and COMESA of creating free Trade Area. This boasts population of close to 540 million and USD 1trillion GDP. Ladies and Gentlemen; Besides its geography Tanzania itself presents abundant investment opportunities in agriculture, mining, tourism, manufacturing, fishing, ICT, and infrastructure development. In agriculture there is plenty of arable land yet to be utilized, the climate is permissive and there are adequate water resources for irrigation. In mining nearly all minerals known to exist in the earth crust also do exist in Tanzania and some in large qualities. Of recent, with the new discoveries of sizeable natural gas deposits, it makes Tanzania to be a prospective an emerging market for gas production in the world. In the hospitality industry with the beautiful and historic spice Islands of Zanzibar and exotic world renown game parks, on the mainland. Tanzania is a tourist destination worthy investing now and in future. With the huge lakes and 1000 km of sea coastline and the 200 km EEZ, fishing is a highly prospective investment opportunity. Right now there is no serious fishing in our sea. There are limitless opportunities in infrastructure development, telecommunications, power generation, railways, ports development, airports, airlines etc. With a huge raw material base from agriculture, mining, fishing and forestry investments in manufacturing present huge potential. There is, as mentioned earlier, a sizeable own market of close to 45 million people, 120 million people East African Community and 200 million people of SADC market. But we also have market access arrangements with the USA under AGOA, European Union (Everything but arms), China and Japan which makes investing in Tanzania even more attractive. Skilled Labour Force Ladies and Gentlemen; Tanzania, also boasts of having sizeable population of skilled labour force. Over the years, we have invested substantially in education at all levels, from primary to secondary school and higher learning. We have also expanded vocational education and established training centres in every region of the country. These have been useful in training highly qualified experts in many fields as well as technicians and artisans in various trades. While we have invested heavily in education to develop the local talent, we are keen on working with businesses on innovative ways to develop the local talent that is relevant to the specialized areas of interest. It is important to note also that labour in Tanzania is relatively less expensive compared to many other parts of the world. Ladies and Gentlemen; The business climate that I have just described has already attracted growing number of foreign and local investors from different countries to Tanzania. Oman is also included in that list as between 2000 to 2011, Omani investors have registered 36 projects worth more than USD 200 million in different sectors. This is not much compared to what can be availed by Omani business community. We look forward to increased investments because as I mentioned, opportunities are many. The returns are good, protection is guaranteed and incentives are really competitive. We also look forward to increasing trade between Tanzania and Oman, which is currently very low. So I warmly welcome you to come to Tanzania and explore the unlimited, trade, investment and business opportunities which our country has to offer. Ladies and Gentlemen; Those interested in investing in the manufacturing business can take advantage of the opportunities which exist in the various Export Processing Zones (EPZ) and the Special Economic Zones (SEZ) which we have set up to promote and facilitate industrial development and export of manufactured goods to the worlds. We cannot continue to be exporter of raw materials. We want to add value to our primary products. We will support all those of you who will opt to operate in these designated zones. Ladies and Gentlemen; Let me conclude by saying the following. First, Tanzania meaning both Zanzibar and Tanzania Mainland is ready to do business with you. Our doors are wide open. Secondly, Tanzania have everything that you need to look for in taking a decision about where to invest: conducive business environment, political sound economic policies, macro-economic stability, abundant natural resources, relative educated labour-force, a sizeable and captive market because of Tanzania's unique geographical location. Above all, the government is facilitative. The list is long, I can hardly exhaust it. As mentioned earlier these will be elaborated further in the course of your discussions by the representatives of the Tanzania Investment Centre (TIC) and the Zanzibar Investment Promotion Authority (ZIPA) who are here with us. Several ministers are also here to clarify on some of these issues and concerns. Above all, business men and women from Tanzania are also here to share their experiences and expectations. After those many words, I declare the Tanzania – Oman Business Forum is officially open. I thank you for listening and wishing you very successful deliberations. Thank you very much and God bless you.