I am grateful for this opportunity to comment on the main aspects of relations between Canada and Tanzania, and I will touch on three: trade, investment and tourism.
With respect to trade, our two countries have close and long relations. Since 2009, Tanzania has been one of 20 countries, and only seven from Africa, that are priority partners in development co-operation and principal beneficiaries of Canadian assistance. Since 2004, we have had a trade agreement that permits duty-free access into Canada for most goods produced in Tanzania.
But the level of trade between the two countries is still minimal. According to official figures, Canadian exports to Tanzania in 2009 were worth $52.4 million; mainly in textile products and heavy machinery. For a major trading country, and compared to what Canada exports elsewhere, this is very little. And exports from Tanzania to Canada (excluding minerals) in the same period were far lower — worth a mere $3 million. These were mainly vegetable products. The main drag on Tanzania’s part is lack of capacity to assure reliable production and to supply a market that is so far away. Producers in Tanzania prefer to sell to countries in the Middle East, Southeast Asia and Europe; and buyers in Canada prefer to source from Asia, Latin America or even West Africa.
To overcome this challenge, we have taken steps to encourage investors from across the globe, including Canada, to invest in sectors of our economy that offer high returns. These include agriculture, agro-processing, lapidary and manufacturing. Through the Tanzania Investment Centre (TIC) and Export Processing Zones (EPZA), we have mechanisms and incentives which, coupled with a sizable skilled and semi-skilled labour force and low production costs, ease the process and cost of investing in Tanzania. End products from EPZA can then be exported to Canada at competitive rates.
For their part, investments are estimated at more than $2 billion with Canadian mining companies among the largest foreign investors in Tanzania. Despite persistent challenges of inadequate power supply and infrastructure constraints, we offer comparatively attractive and competitive terms to investors.
Two developments will improve the situation. Firstly, we have a new mining act with impartial, consistent and predictable legal provisions for the protection of interests of all stakeholders. This will increase harmony and trust and promote business. Secondly, negotiations for a Foreign Investment Promotion and Protection Agreement (FIPA) between our two countries are nearly completed. When concluded, FIPA will create a framework of legally binding rights and obligations for the protection of investors’ interests, and thus attract more Canadian investors.
And there are other potential areas of investment in Tanzania apart from mining. In the 1970s and the 1980s, Canada provided extensive technical assistance to Tanzania in the sectors of agriculture and infrastructure, especially the railway system. Right now, boosting agricultural output and reviving railways are among priority areas in our development plans. Some of the experts who were involved then are still active in the same or related fields here. They have good knowledge of our problems and needs, and such assets could be utilized now in the pursuit of our objectives. Such people could also be the channels and catalysts to drum up Canadian interest in investing in these sectors.
Finally, Tanzania offers a unique combination of tourist attractions. From exotic Zanzibar to the spectacular Ngorongoro Crater, from the Plains of Serengeti teeming with wildlife in their millions to the sight of snow in the tropics on the summit of Mt. Kilimanjaro, the highest free-standing mountain in the world, we have it all in abundance and in a combination unlike anywhere else on earth.
My mission is to make these gems of nature known as widely as possible in Canada so as to tap into the tourist market here on a higher scale. And we are succeeding. For example, between 2005 and 2008, Canadian tourists to Tanzania increased by 50 percent from 11,000 to 16,500. There was a slight dip in 2009 and 2010 due to the economic crises and their adverse effects on the global tourism industry, but we expect numbers this year to exceed the 2008 level.
Our focus and interest go beyond attracting tourists from Canada. Tourism is a major sector in our economy. Last year, we had about 800,000 tourists and we expect this number to rise to 1.2 million by 2015. This surge will create more investment opportunities in the hospitality industry, and I believe that Canadian firms are well placed to join in.
