- Russia and Tanzania are holding trade talks aiming at revamping commercial ties between the two nations.
- At the moment, Russia projects at doubling trade with Tanzania.
- Russia to use Tanzania as a single port of entry to access the African market.
Russia has pledged to double current trade value with Tanzania as authorities from the two countries met in Dar es Salaam Tanzania. The pledge was made at the first Russian-Tanzanian Intergovernmental Commission on Trade and Economic Cooperation at the start of the week in Tanzania’s commercial port city where the meeting is being held.
Russian Economic Development Minister Maxim Reshetnikov visited the country along with a delegation of Russian businessmen representing more than 50 Russian companies.
“Based on our estimates, trade between our countries could double,” Mr. Reshetnikov said. “We stand ready to help the Tanzanian economy maintain the high pace that has achieved in the energy, agriculture, infrastructure development and tourism sectors,” he added.
The Russian minister said the two countries share mutual political and diplomatic understanding. He said based on their long standing business relation, they already have “…good preconditions for stepping up trade and economic interaction. There is considerable unused potential,” the minister noted.
Following the meeting, Russia and Tanzania are expected to conduct joint projects in energy, agriculture, infrastructure and tourism.
The two countries also signed an agreement on commercial air services back in June, which is an important landmark in promoting trade investments, particularly in the travel sector, and new agreements are expected after the meeting.
Hosted by Tanzania’s Prime Minister Kassim Majaliwa, the meeting resulted in the two countries agreeing to strengthen economic cooperation, trade and investment.
Tanzania’s Prime Minister Majaliwa said the talks will foster strengthening of economic, trade and investment cooperation between the two countries.
He reassured Minister Reshetnikov of Tanzania’s readiness to work with Russia and said his country is the ideal destination for Russian investors given its stable political environment and strategic geographic location in the region.
“The Tanzanian government under Dr Samia Suluhu Hassan is committed to improving trade relations with Russia. Through this visit, I am confident you will receive valuable insights that prove Tanzania is a prime destination for business,” the Prime Minister reassured the delegation.
“We have reliable transport from Dar es Salaam to Kapiri Mposhi in Zambia, enabling goods to reach other countries. When the SGR is completed, it will allow for freight transport to Rwanda, Uganda and DR Congo,” the Prime Minister explained.
He also pointed out that Tanzania itself offer a large internal market commanding a customer base of over 61 million. The country also has access to the rest of the larger East African market that represents over 300 million people and to the even larger SADC region as well.
“Tanzania serves as a gateway to eight neighbouring countries, with two others on the verge of joining…” Prime Minister Majaliwa said citing access to the Comoros and South Sudan that have expressed interest to join the EAC trading bloc.
The Prime Minister also noted that the number of Russian tourists visiting Tanzania has been growing in the past five years despite the pandemic and other global upheavals.
Prime Minister Majaliwa seized the moment to invite representatives of Russian companies to visit Tanzania and explore investment opportunities. He said Tanzania is open for business and Russian investors are welcomed in all sectors.
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Russia to use Tanzania ports, access Africa market
The meeting resolved that Tanzania does have an advantageous position on the coast of the Indian Ocean making it a prime location to become a single point for Russian products’ entry into the African market.
The International Information Group, Interfax, quotes the Russian delegate saying the move would serve to help develop the North-South transport corridor and will give Russia access to the East African Market as well as Central Africa and most of the rest of the SADC countries.
“We have identified strategic priorities. First of all, logistics. The advantageous geographic position of Tanzania on the coast of the Indian Ocean and connection to other African countries unlocks great opportunities for Russia,” Russia’s Reshetnikov announced.
He went on to point out that; “The republic could become the single point of entry for our products into the African continent and develop the North-South transport corridor. In turn, our country could provide Tanzania with a window to the market of the Eurasian Economic Union.”
The Russian diplomat also noted that energy cooperation between the two countries has a great potential for mutual benefits.
“This includes peaceful use of atomic energy, construction of renewable energy facilities, and extraction of mineral resources,” Reshetnikov detailed.
He seconded his host on agri-business development saying; “Agriculture, pharmaceutics, digitalization of the economy, urban environment and, obviously, tourism are the focus. We are ready to discuss all of that and solve problems with settlements and contacts between banks in our countries together.”
Russia and Tanzania trade value
Russia is one of the world’s leading economies and currently ranks fifth by GDP in the world as of 2023. Given its enormous economy, Russia has a lot to offer Tanzania.
Given the fact, the Russian-Tanzanian intergovernmental commission on trade and economic cooperation is vital to growing trade between the countries. Tanzania stands to gain especially since it is very dependent on Russia for its cereal supply but it could also benefit from technology transfer and direct investments from Russia.
According to the Russian Federal Customs Service, exports of goods from Russia amounted to $494 billion in 2021, but the share of energy sector products have decreased from 71 per cent to 54 per cent since 2011,the authority admits.
Nonetheless, Russia’s generous natural resources reserves as well as its diversified and high-tech national economy result in high demand for Russian goods abroad.
“The significant potential of Russia-Tanzania trade and economic relations has not been fully explored by now,” says the Russian Federal Customs Service.
According to the World Bank classification, Russia holds the status of an upper-middle-income economy and is a promising market for imports. Tanzania can offer some of the imports that Russia needs including minerals (uranium, chromium, bauxite) and tropical crops which are all in high demand in Russia.
“For example, Russia imported $34 billion of food and agricultural raw materials in 2021,” the World Bank notes.
However, owing to various factors, according to the Economic Observatory, during the last five years the exports of Russia to Tanzania have decreased at an annualized rate of 7.37 per cent, from $164 million in 2017 to $112 million in 2022.
In 2022, Russia exported $112 million to Tanzania. The main products exported from Russia to Tanzania were Rye ($28.1 million), nitrogenous fertilizers ($26.3 million), and Wheat ($23.1 million).
In 2021, the turnover of trade between Russia and Tanzania amounted to about $200 million, with the share of exports from Russia estimated at more than 80 per cent. Russian exports to Tanzania are mostly grain and fertilizers, while Tanzanian exports to Russia consist entirely of agricultural raw materials (unprocessed coffee, tobacco, tea, edible oil).
