Africa Specialty Risks recently attended an investor event organised by Invest Africa and the Norwegian-African Business Association (NABA) in Dar-es-Salaam, Tanzania. The team was excited to learn about Tanzania’s recent and prospective economic growth, the increase in development spending and growing investor and consumer confidence.

Performing business in Tanzania is becoming more attractive year on year. Between 2016 and 2020, Tanzania’s economy grew by an average rate of 6.5%. More recently, as outlined by Finance and Planning Minister H.E. Dr. Mwigulu Nchemba, the country recorded 4.8% growth in 2021 and 5.2% projected in 2022, reflecting continuously strong economic growth for the past 6 years.

There are also promising political developments in the country. President Samia Suluhu Hassan was sworn in on March 19, 2021, as the United Republic of Tanzania’s sixth, and first woman, president, following the death of President John Magufuli. Whilst President Hassan’s policies reflect an evolving social and economic context, the broad policy objectives remain guided by the Tanzania Development Vision 2025 and its supporting five-year development plans, reflecting political incentives for investment in the country as government stabilises and is focused on economic growth.

Economic growth in Tanzania is being fuelled by agriculture, livestock, minerals, and the development of infrastructure projects like rail, ports and terminals. These sectors all benefit from unique fiscal incentives for the country, such as import duty exemption on project capital goods and raw materials.

Fiscal incentives have rendered lucrative growth prospects for individual sectors. In construction, for example, a rapidly growing population at 2.7% p.a. has generated high demand for houses, hotels and office accommodation in the capital Dodoma, and financial centre Dar-es-Salaam.

Gas discoveries in Tanzania are catapulting the country into a major player in global energy. Currently, discovered oil and gas resources in the country have grown to 13% of the entire East African deposits generating lucrative opportunities for both upstream and downstream projects. In April 2022, an agreement was signed between the government and exploration companies to construct a vast LNG plant worth circa USD 30 billion. It is expected that by month end, a Host Government Agreement will be reached establishing the fiscal, legal and commercial terms for the onshore part of the project.

Financial incentives coupled with significant economic growth which is projected to accelerate across a number of sectors paints an attractive picture for investment into the country. However, as with several investment propositions across Africa, policy certainty is necessary to provide investor confidence, and businesses need resilience to insure against risk exposure ranging from sector specific, such as construction and energy, to specialty coverage like political risk and trade credit, political violence and terrorism, and parametric.

ASR’s specialty business coverage can provide businesses with the level of resilience needed to support investment and complete the picture. For example, our political risk insurance and trade credit products are regularly sought to protect against credit risks, political risks as well as contract frustration. Other examples include our energy products that cover physical damage and business interruption resulting from machinery breakdown, fire, natural catastrophe’s, amongst other perils.

There remains an insurance gap in the African market, and ASR’s core strategy is to de-risk and enable investments across Africa. ASR can advise clients and partners on risk exposures and insurance solutions to ensure they successfully achieve their objectives and businesses remain resilient. ASR’s intent is to form strong long-term relationships with clients and advise them on how to manage their ever evolving risk landscape, in order to differentiate themselves from their competitors.

Delegate visit to Port of Dar es Salaam with Bolloré Logistics.

 

Mikir Shah (CEO at ASR), Mr. C B Reddy (CEO at A One Products and Bottlers) and Mr. Prabodh Bhavalia (GM Products at A One Products and Bottlers), and Constança Soares (BD Executive at ASR).

 

Delegate visit to the Tanzanian Ministry of Finance & Planning.

 

Constança Soares (BD Executive at ASR), Hon. Prof. Makame Mnyaa Mbarawa, Minister of Works & Transport, Mikir Shah (CEO at ASR).