1. Tanzania Country Profile
Tanzania, a country of Mountains and Hills, Beautiful Plateaus, Waste Grass Fields, Scenic River Basins, and Valleys have remained a favourite tourist destination on the international tourism map. Renowned for abundance of wildlife resources, cultural heritage resources, forest resources, unexploited beaches and marine resources. It’s 945,203km2 area on the Eastern side of Africa is made up of 22 National Parks (including a new National Parks named NYERERE, UGALLA RIVER AND KIGOSI NATIONAL PARKS that have been added in the list on July 2019, 28 Game Reserves, 42 Game Controlled Areas, 1 Conservation Area, 4 Ramsar Sites, 33 Wild-life Management Areas, 6 Nature reserves, 2 Marine parks and 3 Natural Wonders of the World that invites and welcome tourist from the countries around the globe. Its 800km coastal length along the Indian Ocean has seen prospering a human population of 56 million according to Tanzania National Bureau of Statistics (2017) that has been growing at an average rate of 2.92% over the time. With more than 120 ethnic groups, and Swahili being a main unifying language is an official language of the country and English to a lesser or a greater extent.
Tourism is one of the fastest-growing sectors from GDP contribution point, which has contributed 17.5% of the GDP and 30% of the foreign exchange earnings in 2014-15 (MoFP,2016). Given its endowment and having exceptionally rich natural tourism assets of world heritage status, Tanzania’s tourism sector is an ideal vehicle for propelling growth and poverty reduction. The country is ranked 4th among 140 countries with regard to the endowment of tourism-related natural resources (MoFP,2015)
It is no wonder why Tanzania has been a leading destination for Foreign Direct Investment (FDI) in the East African region. According to the ‘National 5-Year Development Plan’ (2016/17- 2020/2021) the Government of Tanzania targets tourism growth at the rate of 6.2%, and the tourism share in the GDP to reach as high as 18.3% and 19.5% by the financial year 2020-2021 and 2025-2026 respectively.
Further assurance of return of the investment can be easily worked out on the basis of the country’s stable, consistent and improved economic performance, successful economic and structural reforms. Tanzania, by adopting multiparty democracy in 1992 has created political and economic stability which both are characterized by parliamentary democracy and public consensus on key socio-economic priorities. Being a country with next to none ideological confrontations, and lacks ethnic problems or labour disputes, Tanzania provides a great opportunity to the investor where the opportunities are immense.
2. Tanzania Tourism Sector
Tourism Development Levy and Tanzania Tourism Business License (TTBL) are the major revenue components in the sector with the contribution of 62.4 percent and 37.5 percent respectively.
In Dec 2017, the Ministry of Industry, Trade, and Investment has published a Blueprint for Regulatory Reforms, to improve the business environment in the country. One of the very critical recommendations is the re-introduction of multiple-entry passes into parks in order to get rid of its inconvenience to the tourists, which TANAPA has already addressed.
3. Benefits of Investing in TANAPA
TANZANIA NATIONAL PARKS (TANAPA) is a Parastatal Organization of the Tanzania Government that is mandated to manage and regulate the use of areas designated as National Parks. The organization’s core business is sustainable conservation and nature-based is the main source of income. The funds available from tourism income is reinvested in various conservation programmes, for parks infrastructure development and maintenance and community outreach programmes.
TANAPA has developed and currently following its Medium-Term Strategic Plan (MTSP) which is for the 5 years’ term 2018/2019-2022/2023. The MTSP has set a clear vision for TANAPA to ensure that the National Parks remain competitive as well as an iconic symbol of Tanzania’s National Heritage and Prestige while contributing to the National Conservation Objectives and Development agenda.
TANAPA follows its Vision of ‘Sustainable conservation of national park resources and values for the benefits of mankind’ and its Mission which is “to sustainably conserve National parks through innovative approaches for maximization of ecosystem services and optimizing tourism development for human benefits”.
MTSP has recognized that all parks are the intricate mixture of values and resources, each with its unique qualities and purpose, requiring specific treatment in the development and implementation of strategies, management plans, and operational systems. Thus, it assures an investor that due diligence is in place for the specific requirements of the specific location, type of project, and type of investment; rather than generic rationale in investment decisions.
It is a universal truth that ‘competition and challenges are the drivers for improvement and success’. It applied to the investment in the park run by TANAPA, Ngorongoro Conservation Area Authority (NCAA), Tanzania Forest Service (TFS), The Tanzania Wildlife Management Authority (TAWA) are the major internal competitors. They all bring competition from within.
Tanzania, by offering similar products to TANAPA. There is also competition from neighbouring countries such as Kenya, Uganda, Zimbabwe, Zambia, South Africa, Botswana and Namibia as they all are offering nature-based tourism, like TANAPA.
There are obvious challenges for the investment projects in TANAPA, namely Protection and Promotions of Tourism Products, inadequate diversification of tourism activities and Insufficient Infrastructure to the parks, Population Increase around the parks (human-wildlife and boundary conflicts) and Incompatible land-use practices.
Regardless of the competitions and challenges, TANAPA has continued to excel in providing the best safaris in Africa. Investment in the parks managed by TANAPA would give an added advantage to the investor in meeting challenges and compete against the rivals due to the high level of help, support, guidance, incentives, and resolutions offered by TANAPA during the whole life cycle of the investment project.
Investment in TANAPA is well recognized by Tanzania Investment Centre (TIC), which is a government institution serving as a one-stop centre in coordinating, encouraging, promoting and facilitating all kinds of investment in Tanzania. Similarly, TANAPA is regarded as one of the positively influencing stakeholders by Tanzania National Business Council (TNBC), which is a key institution for dialogues between private and public sectors in Tanzania. TNBC has proved to be an effective organization for a clear and concise interaction between the diverse stakeholders, investors, and the Government.
TANAPA – as an institution, well recognizes the Investment Guarantee that any investor would avail due to Tanzania’s memberships as a country in Multilateral Investment Guarantee Agency (MIGA), and African Trade Insurance Agency (ATIA), which both provide political risks insurance to the private sector investors (Source:http://www.ati-aca.org/investor-information/ current-members/)
Being a member of the International Centre for Settlement of Investment Disputes (ICSID), an investor in Tanzania would easily avail the resolution of any issue that may have not been foreseen (Source: https://icsid.worldbank.org/en/Pages/about/Database-of-Member-States. aspx).
4. Types of Investments available within TANAPA
Investment can be as an individual or in partnership with other local or international groups, institutions, organization or private companies. The investment project can be either Build, Operate and Transfer (BOT) or Design, Build, Finance, Operate and Transfer (DBFOT).
- Tented camps
- Balloon safaris;
- Canopy walkways;
- Cable car safaris;
- Horse Riding;
- Trail Walk Assistance;
- Rescue Operation Services;
- Restaurants, coffee shops, curio shops;
- Fuel supply;
- Water sports
- Cruises tours in selected parks;
- River rafting
- Any other related investment opportunities as they shall be decided from time to time by
5. Who can Invest in Tanzania National Parks
The available Investment Opportunities in the Tanzania National Parks can be done by the following categories of investors including but not limited to:-
- Foreign Individual Person;
- Foreign Company;
- A partnership between Foreign Individual and Tanzanian Citizen;
- A partnership between Foreign Company and Tanzanian Company;
- Foreign Institution / organization;
- Tanzanian Individual; and
- Tanzanian Company;
6. MANDATORY PROCEDURES
6.1. Procedural Requirement for Investment in TANAPA
The entire procedure of investing in an opportunity within TANAPA’s operation is nothing but to meet the requirement of the 14 simple steps, by providing the required documentation and criteria set up under each step, as highlighted below:
6.2 STEP 1
6.2.1 Letter of Interest is required to be submitted to TANAPA:
It is a written letter from the “interested party” (IP), clearly identifying and describing the particular location within the identified park, and the action/task/development in the subject location.
6.3 STEP 2
6.3.1 Providing the IP with the following four (4) important documents from TANAPA:
In 5 days following the receipt of ‘letter of interest’ TANAPA would provide the following documents to the interested party.
- Cover Letter (standard letter)
- Copy of the Guidelines to comply with National Policies
- An approved copy of the Park General Management Plan (GMP) with the site allocation map
- A copy of the Tourism Investment Manual (TIM).
6.4 STEP 3
6.4.1 Preparation of the Development prospectus (DP):
After careful consideration of the compliance requirements of the National Policies for National Parks, GMP and Park Plans, the TIM and relevant Tanzania Policies and Laws, the IP shall prepare DEVELOPMENT PROSPECTUS (DP). Preparing DP should require mandatory approval and permissions from TANAPA. If satisfied with the prepared DP, TANAPA would grant permission, in the form of written approval and other necessary permits for IP to initiate the preparation of the DP. Depending on the kind of development, the DP should meet certain requirements in terms of information and documentation. This Tourism Investment. Manual states the mandatory requirement of the DP under the respective type of the project and the investment.
6.5 STEP 4
6.5.1 SUBMISSION and OPENING of the DP:
The IP shall be required to submit 5 copies of the DP to the Office of the Conservation Commissioner. The received copies shall be stamped the seal of “received” with a date to determine the receipted date. The IP or their representatives may be invited to the opening of the DP.
6.6 STEP 5
6.6.1 RATING of DP:
Within 15 days of the receipt of the DP, a thorough review and rating exercise would be given by TANAPA’s Interdisciplinary Technical Team, in line with the TIM. The team would usually have comprised of the representatives from TANAPA Head Office National Parks Development and Business Development Sections Conservation Officer-GIS at the Zone/Park and Conservation Officer-Ecology and Conservation Officer-Tourism for the respective park and other specialists; however, an additional Independent Technical Opinion may be sought if needed to ensure no preferential treatment is given to any particular IP.
6.7 STEP 6
6.7.1 Conservation Commissioner’s review and decision:
The recommendations from TANAPA’s technical team would be reviewed by the Conservation Commissioner (CC) for decision. A letter of approval or rejection would be provided with the reasons, as applicable. If there is only one IP for any particular project and investment, IP would be given another opportunity to resubmit the amended DP within four (4) weeks of the letter of rejection. If there are more than one IPs for the same investment opportunity, the CC would approve successful IP for that opportunity, based on the recommendation of the TANAPA’s Technical Team. All unsuccessful IPs will be informed in writing within one (1) week.
6.8 STEP 7
6.8.1 Permission Letter:
For any successful DP, the CC will inform in writing the successful IP, granting permission to proceed to the next step.
6.9 STEP 8
6.9.1 Hydrological report:
The successful IP would have to provide a hydrological survey report carried out by a qualified/ approved firm or team of specialists. The survey report should have verified and established the availability of an adequate supply of potable water for construction and operations of the development or action. Water quality, quantity, access and reliability reports, along with complete bore-holes drilling records would be required in the hydrological report. The IP shall submit 2 (two) copies of the hydrological survey report and an electronic (soft) copy to TANAPA Head Office and the respective park(s). Based on the report, CC would either issue a ‘Letter of Offer’ or rejection letter. In case the rejection letter is issued, the IP should re-start from step 1, with a better plan/project/investment for addressing the hydrological issues highlighted in the rejection letter.
6.10 STEP 9
6.10.1 Project Proposal:
Following the receipt of the ‘Letter of Offer’ from TANAPA, the IP shall confirm their acceptance in writing, and pay the non-refundable tourism investment site allocation fee applicable to the respective park. The IP shall prepare the ‘PROJECT PROPOSAL’ and ‘BUSINESS PLAN’ at their own costs, and in accordance with the requirements set out in the TIM.
6.11. STEP 10
6.11.1 Submission of documents:
The submission of 5 copies of the PROJECT PROPOSAL and the BUSINESS PLAN shall be made within two (2) months from the date of the issuance of the LETTER OF OFFER. Failure to submit these documents in the prescribed time limit may allow TANAPA to rescind the ‘Letter of Offer’ and consider other available DPs & IPs for the investment opportunity.
6.12 STEP 11
6.12. 1 EIA certificate:
In the 12-14 weeks time following to STEP 10, the IP shall undertake and submit the report of the EIA in accordance with Environmental Management Act 2004 and the mandatory regulations in consultation with the National Environmental Management Council (NEMC) and TANAPA.
6. 13 STEP 12
6.13.1 Proposal notification letter:
Following the compliance of Step 1 to Step 11, in meeting the mandatory requirements stated under each step, TANAPA would issue a ‘Proposal Notification Letter’.
6.14 STEP 13
6.14.1 Standard license agreement:
Before commencement of any of the project and investment activity, a negotiation between the IP, the TANAPA Directorate of Conservation and Business Development team and the SACC- Legal Counsel shall be undertaken in order to finalize terms and conditions for the Standard License Agreement.
6.15 STEP 14
6.15.1 Project Implementation, Monitoring and Evaluation:
During the construction phase, TANAPA would have a right to assign a full-time professional construction supervisor to the construction site in order to ensure IP’s adherence with the terms of the TIM and the License Agreement. Especially any mitigation stipulations and other conditions or requirements laid out in the technical review and EIA, would all be thoroughly reviewed and monitored during the construction phase. TANAPA would at all times, reserve the rights to have access to the work area for the general monitoring and evaluation purposes and providing relevant guidance and support.
7. Other Mandatory Requirements
7.1 Business Plan
A business plan will be submitted as a separate document with the DP and should include the following details:
- Market viability analysis of a project
- The projected occupancy rate for the next 7 years
- Cost/Benefit analysis
- Projected revenue and profits for developer and TANAPA’s Tourism Concession fee from operations of the proposed investment
- The projected time frame for the developer to recover costs.
7.2 Project Proposal
The IP will prepare the PROJECT PROPOSAL as per the format and content of this policy document. It will be the responsibility of the IP to ensure that the PROJECT PROPOSAL takes into account all environmental considerations when developing the proposal. The IP will be responsible for ensuring that the PROJECT PROPOSAL document meets the Procedural Requirements, and Site Selection Criteria of this document. The IP will bear all costs associated with the preparation of the PROJECT PROPOSAL and BUSINESS PLAN documents. The IP (not the consulting firms) will be responsible for getting all clearances, permits, and approvals associated with this TIM.
To read more about investment opportunities in Tanzania National Parks (TANAPA) kindly download the full invest meant manual here. TANAPA (Investment Manual)
Source/Credit: TANAPA (Tourism Investment Manual-2019-2024)