Frontier market of Tanzania up for grabs for Iranian business ventures
By Reza Abesh Ahmadlou
Staff writer
As Western markets reach a saturation point, developing nations have become the new field for global economic supremacy. Within this landscape lies Tanzania, an expanding market 0f over 68 million in East Africa that is ripe with opportunities for expansion, particularly for Iranian state-run and private sector companies looking to extend their global footprint.
Tanzania boasts one of the most stable political climates in Africa, paired with a consistently growing economy, making it a beacon for foreign investors. The country’s strategic geographical location, sharing borders with eight countries and with access to the Indian Ocean, positions it as a central trade hub in the region. With sustained GDP growth averaging over six percent per year, Tanzania is enticing for businesses seeking new growth markets.
Iranian companies should note Tanzania’s potential, with sectors such as construction, agriculture, oil and gas, as well as mining showing particular promise. Considering Iran’s strengths in engineering, non-oil exports, and technology development, there could be a significant synergy between the two countries’ economic landscapes.
Tanzania has aimed for a robust infrastructure network supporting a middle-income economy. With numerous projects underway, including road, rail, and airport, the demand for construction and engineering services is high. Iranian companies with expertise in large-scale construction and infrastructure development can capitalize on these openings, contributing to Tanzania’s growth and establishing long-term ties within the country.
Approximately two-thirds of Tanzania’s population is employed in the agriculture sector. However, the industry has not reached its full potential due to a lack of technology and modern practices. Iranian agribusinesses, with a wealth of experience in arid climates and agriculture technology, could find Tanzania’s vast arable land an excellent opportunity for investment. Engaging in crop processing, extraterritorial cultivation and agricultural technology transfer would not only be profitable but would also foster goodwill through enhancing food security.
Tanzania holds sizeable natural gas reserves in Sub-Saharan Africa, alongside significant deposits of minerals like gold and diamonds. Despite sanctions limiting its oil and gas industry, Iran possesses extensive experience in these sectors. Collaborating or investing in Tanzania’s extraction industries could open new revenue streams for Iranian companies and contribute to the local economy’s diversification.
Iran also has made considerable headway in renewable energy, primarily in hydroelectric, wind, and solar power. Tanzanian renewable energy efforts are still in the embryonic stages, representing an untapped market for Iranian energy firms. By investing in Tanzania’s renewable energy sector, Iranian companies could not only enjoy first-mover advantages but also aid in reducing the country’s carbon footprint.
Creating operational alliances with local businesses and understanding the cultural nuances of the Tanzanian market is critical for success. Joint ventures can offer Iranian enterprises valuable insights and ease their market entry while providing Tanzanian firms with technical expertise and investment. Additionally, Iran’s experiences with sanctions have forced it to be innovative and self-reliant, an approach that could greatly benefit Tanzanian industries.
To fully exploit the mutual benefits of Iranian and Tanzanian business cooperation, both nations need to cultivate a supportive environment for investors. It includes refining trade agreements, easing investment laws, and fostering direct diplomatic engagements to ensure a smooth cultural and business integration.
Iran’s outreach to Tanzania aligns with its broader strategic goals for economic diversification beyond oil. As Tanzania continues to seek investment to fuel its development plans, the synergies between the two become more evident. This provides a backdrop for Iranian state-run and private sector companies to forge a presence in a dynamic and expanding market.
Investments need not be restricted to natural resources and infrastructure. Iran’s strengths in educational services and healthcare provision can address significant gaps in Tanzania’s public services, improving human capital and the quality of life.
East Africa’s market is not just a land of opportunities; it’s the threshold of a new collaborative era for Iranian ventures. The prospects for growth in Tanzania are exponential and ready to be harnessed by those willing to take the first step. For Iran’s public and private sectors, Tanzania represents not just a market, but a gateway to the African continent and a symbol of the global outreach that Iranian enterprises are more than capable of achieving.
As markets evolve and integrate further, the entrepreneurial spirit of Iranian companies, coupled with Tanzania’s welcoming business climate, could set the stage for a flourishing partnership that stands the test of time.
As a positive sign, Iranian Foreign Minister Hossein Amir-Abdollahian held a phone conversation with his Tanzanian counterpart January Yusuf Makamba in September to exchange views on bilateral ties and issues of mutual interest.
During the phone call, he emphasized that Iran is ready to reinforce bilateral ties, especially for economic, scientific and technological cooperation.
For his part, Makamba expressed his country’s readiness to develop its bilateral ties with Iran.
The Tanzania foreign minister reiterated that his country’s president has invited Iranian President Ebrahim Raisi to visit Dodoma.
During the talks, both sides touched on the recent meeting of the presidents of the two countries on the sidelines of the BRICS summit in South Africa, and agreed to hold a joint commission between the two countries.