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Tanzania Uses Tourism Success To Boost Investment

Tanzania’s focus on upscale tourism is paying off, according to government officials.  Recently, it was featured by Robert Frank (below) on his CNBC program “Secret Lives of the Super Rich” as a hot spot for billionaires. Its lodges and hotels such as Singita, Kirawira, Four Seasons Safari Lodge (pictured), Gibb’s Farm, and a growing list have been collecting shelves of awards. Best of all, there is demand for more.

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Growth has been so significant that tourism receipts have now surpassed mining, says Juliet R. Kairuki, Executive Director of Tanzania Investment Centre (TIC), the government’s arm that generates foreign investment.

The country bills itself as “Land of Kilimanjaro, Zanzibar, and Serengeti,” and while continuing to court quality tourism for visits, Kairuki is actively pursuing investment tourism tapping into to wealthy visitors to come back and also look at business opportunities.

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To make it easier for elite travelers, TIC has published a 100-page investment guide on its website at www.tic.co.tz and has “completely restructured” to become “sector specific, customer oriented.”

In 2015 the country will host a hotel investment forum, and CNN will also visit next year for its annual African Journalist of the Year awards ceremony. Growth of the nation’s middle class is spurring consumption and the economy, and to that end Kairuki said foreign companies re-invest 79 percent of their profits, a sign of confidence in future growth.

Priority areas of investment include agriculture and livestock development, natural resources, manufacturing, petroleum and mining, real estate, transportations, services, finance, telecommunications, energy, human resources, economic infrastructure, and broadcasting, with tourism being of top interest in that it generates multiplier jobs for small business and rural areas. Other targeted areas include education, health, insurance, security services, construction, water, and sanitation and waste management.

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The government offers “fiscal and non-fiscal incentives” and “follows international best practices,” says the TIC head, paying particular attention to “protect capital from taxes.”

During a presentation to the New York chapter of The Luxury Marketing Council she said Tanzania’s customer centric approach to investment is paying off, citing an agriculture project with Unilver as well as university partnerships with University of Illinois and Rutgers University. Harvard Business School is currently preparing a case study on the country’s success, she says.

In fact, investment and remittances now outpace aid money, and the government is proactively upgrading its international banking to better enable “money to flow across boarders.”

On its website, the TIC notes Tanzania offers peace, political stability, and strategic location as well as its membership in regional blocs and bilateral trade agreements, plus special economic zones and investment guarantees.

Cheryl Lapow, a representative from South African Airways noted Tanzania is a hot incentive destination, particularly with pharmaceutical, financial services, insurance and consulting clients while Alp Ozaman of Turkish Airlines pointed to the 2012 addition of flights from Istanbul to Kilimanjaro saying after starting four times a week the route is now flown daily. Lapow noted demand is particularly strong for premium cabin tickets.