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INVESTMENT OPPORTUNITIES INVESTMENT OPPORTUNITIES IN ZANZIBARIN ZANZIBAR

PRESENTED BY SHARIFF A. PRESENTED BY SHARIFF A. SHARIFFSHARIFF

DIRECTOR – INVESTMENT DIRECTOR – INVESTMENT FACILITATION,FACILITATION,

ZANZIBAR INVESTMENT ZANZIBAR INVESTMENT PROMOTION AUTHORITY (ZIPA)PROMOTION AUTHORITY (ZIPA)

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Investments

Investments

Investments

Investments

Inflation 18% (2012)

Area (Sq km.) 2,654Unguja 1,666Pemba 988

Population1.3Million

(Census 2012)

Per Capita Income $617

(2011)

GDP Growth Rate 6.7%

(2009)

Investments

ZANZIBAR OVERALL ECONOMIC OVERVIEW

Zanzibar

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Table 1: Zanzibar’s current account, US$ million, 2004-2008

 Year Ending June

Annual % change

Item 2004 2005 2006 2007 2008

Goods Account (net) -51.3 -71.6 -67 -65.1 -77.8 19.6

Exports 13.1 7.2 11.8 15.9 16 0.8Imports (fob) 64.3 78.9 78.8 81 93.8 15.9Services Account (net) 11.1 20.8 19.9 41.6 34.1 -17.9

Receipts 39.4 58.9 81.2 92.2 75.9 -17.7

Payments 28.4 38.1 61.3 50.7 41.8 -17.6

Goods and Services (net) -40.2 -50.8 -47.1 -23.5 -43.7 85.9

Exports of Goods and Services

52.5 66.1 93 108.1 91.9 -15

Imports of Goods and Services

92.7 117 140.1 131.6 135.6 3

Income Account (net) -0.1 0.17 0.36 0.21 -1.02 -579.7

Receipts 0 0.19 0.36 0.3 0.17 -42.5

Payments 0.1 0.02 0 0.08 1.19 1,300.20

Current Transfers(net) 14.2 11.2 50.2 56.4 53.7 -4.8

Inflows 14.2 11.2 50.2 56.4 53.7 -4.8

Outflows 0 0 0 0 0

Current Account Balance -26.1 -39.4 3.4 33.1 8.9 -73

Table below illustrates the Zanzibar Current Account for the year 2004 – 2008.

INFRASTRUCTURE

Infrastructure to support investments Functional Sea Port

Airport servicing international flights Road network covering most investment areas Considerable ground water resources Telecommunication facilities Financial institutions

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FINANCIAL SERVICES Various local, regional and international financial

institutions offer a wide range of services, including facilitating international commercial transaction like opening letters of credit and guarantees. Some of them are:

The Peoples’ Bank of Zanzibar (PBZ)National Bank of Commerce (NBC)Barclays BankFederal Bank of Middle East (FBME)Kenya Commercial Bank (KBC)Exim Bank (T)Western Union (money transfer services)Postal Bank Insurance companies

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Number of foreign vessels called at Zanzibar port from January 2006 – December 2011

•According to Zanzibar Ports Corporation, Department of Marine Services, total number of 1,187 foreign vessels called between January 2006 to December 2011.

•These include general cargo ships, container ships, passenger ships, tankers, car carriers and other types of ships. Number of container ships called within this period were 521 ships

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YEAR DISCHARGED (IMPORT) LOADED (EXPORT)CONTAINERS TOTAL

CONT.CONTAINERS TOTAL

CONTRS.

20’ 40’ 20’ 40’F E F E F E F E

2006 3,735 101 1,640 5 5,481 780 2,723 306 1,373 5,182

2007 4,276 54 2,278 7 6,615 694 3,648 305 1,884 6,5312008 5,722 5 2,966 - 8,693 709 5,050 357 2,627 8,743

2009 9,332 4 3,240 - 12,576 647 8,481 365 2,795 12,291

2010 10,541 53 4,477 1 15,072 737 9,881 294 4,025 14,937

2011 13,750 25 5,998 - 19,773 961 12,510 316 5,735 19,522

TOTAL 47,356 242 20,599 13 68,210 4,528 45,293 1,946 18,439 67,206

Source: Zanzibar Ports Corporation, Department of Operation.

Cargo volume handled in Zanzibar Malindi Sea Port

ZANZIBAR INVESTMENT PROMOTION AUTHORITY (ZIPA)

• Established under THE ZANZIBAR INVESTMENT PROMOTION AND PROTECTION ACT, NO. 11 OF 2004,

• A government focal point for Promotion and Facilitation of investments (private capital) in Zanzibar.

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ZIPA serve, facilitate and provide aftercare services to all investors.

OTHER TASKSInvestment PromotionPolicy AdvocacyImage Building

ONE STOP FACILITATION CENTRE Tax Issues, Land Issues, Business Licensing and

Registration, Immigration and labour issues

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Investors in Zanzibar are protected both constitutionally and through international conventions to which Zanzibar, being part of the United Republic of Tanzania, is a signatory.

Some bilateral and multilateral international treaties signed including Multilateral Investment Guarantee Agency (MIGA), the International Centre for the Settlement of Investment Disputes (ICSID), the Convention for the Protection of Industrial Property and Convention on Recognition and Enforcement of Foreign Arbitration Award and double taxation treaties with several countries

These arrangements guarantee the security of FDI against losses arising from armed conflict or international disorder, and protection against nationalization. Further, they ensure transfer of profit, dividends and capital.

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OPPORTUNITIESOPPORTUNITIES

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Tourism SectorTourism Sector

With emphasis with eco –tourism opportunities exist in the Development of up market /high class chain hotels in Unguja and Pemba

Establishment of specialized cuisine restaurants to serve Thai, Chinese , French, and Japanese (joint venture arrangement) foods

Hotels and Modern RestaurantHotels and Modern Restaurant

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Conference Conference TourismTourism and Amusement Park and Amusement Park

Establishment of Conference and Convention Centres ; and investment in Amusement Parks at Fumba and Micheweni

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Sports Sports TourismTourism

Sports facilities like Golf /Tennis Court and Foot Ball stadium

Sea sports and diving activities

Tourist Ground, Air and Balloon Transport

game viewing experiences are untouched opportunity in Zanzibar

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Services SectorsServices Sectors

Establishment of Specialized Modern Colleges for Hotels and Tourism Management

Establishment of Specialized Hospitals , diagnostic centres and nursing home

Establishment of Shopping Malls

• Health care centres• Education• Business & Financial services• Information and Communication

technology

• Fisheries • Territorial Sea Zone Act and Exclusive Economic Zone Act• Sea Fisheries Act in 1998 as amended in 2002 to implement

government policy on fisheries sector

• Opportunities in Fisheries

• Deep Sea Fishing• Fish Processing & Canning• Aqua culture (fish farming and seaweed production).

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Agriculture• Poultry farming to serve domestic

market, tourism industry and for Export

• Construction of Modern slaughterhouse

• Production of ornamental fish • Flower production (in greenhouses)

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InfrastructureA policy framework on road construction and infrastructure has already been put in place to enable the private Sector to participate fully in construction of roads, bridges, ports etc. under BOT, BOO, and BOOT systems.

Roads Bridges Ports

WHY SHOULD YOU INVEST IN ZANZIBAR ?

Geographical LocationIdeal investment & Profit making destination Historical sites & other Tourists attractionSupportive citizensPolitical and economical stability Trainable and affordable labourConducive Business EnvironmentPeace and tranquility

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INVESTMENT INCENTIVES

Long term lease of land Up 99 years (renewable)

No payment of land rent during construction period• Up to 30 months grace period may be granted.

100% foreign ownership allowed ( Joint venture with locals is encouraged)

Opportunity to employ expatriates in key positionsRepatriation of profits and dividends after

payment of government dues.

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INCENTIVE EPZ Freeport OthersExemption from import duty & similar taxes on machinery, equipment, construction/raw materials & other inputs.

Exemption from taxes on goods for export

Exemption from Corporate tax

100% for the first 10yrs, 75% in the succeeding 10 yrs.

100% for up to the first 20 years.

100% for up to five (5) years.

Sale of up to 20% of production to the local market (subject to all taxes)

N/A

Exemption from tax on dividend for ten years

No No

Exemption from any local taxes for goods produced in the zone.

N/A

On site customs inspection

No

Source: ZIPA, 2013

OTHER INCENTIVES

Industry Total % Total %

A - Agriculture hunting and forestry 28,206,314.00 0.88 25 4.89

B - Fishing 14,266,236.00 0.44 2 0.39

D - Manufacturing 67,591,642.55 2.10 49 9.59

E - Electricity gas and water supply 2,394,000.00 0.07 1 0.20

F - Construction 4,675,000.00 0.15 6 1.17

G - Wholesale and retail trade 36,141,307.00 1.12 36 7.05

H - Hotels and Restaurants 1,545,616,162.38 48.10 295 57.73

I - Transport storage and communications 731,764,366.00 22.77 34 6.65

J - Financial Intermediation 639,345,226.15 19.90 6 1.17

K - Real Estate Renting and Business Activities 53,856,680.00 1.68 14 2.74

M - Education 6,832,146.00 0.21 5 0.98

N - Health and social work 35,312,040.00 1.10 5 0.98

Tour Operation/Diving & Game Fishing 47,417,246.20 1.48 33 6.46

Total 3,213,418,366.28 100.00 511 100.00

ZIPA APPROVED PROJECTS - SECTORWISE

CONTACT:EXECUTIVE DIRECTOR

ZANZIBAR INVESTMENT PROMOTION AUTHORITY(ZIPA)P.O.BOX 2286ZANZIBAR - TANZANIA

TEL: 255 24 2237353FAX: 255 24 2232737EMAIL: zipa@zanzinet.com

zipaznz@zanzinet.comWEBSITE: www.zanzibarinvest.org

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AHSANTENI

SANA