Economic and Commercial

DOING BUSINESS WITH ZANZIBAR: BACKGROUND NOTE

 

Zanzibar, a small Island of the coast of mainland. It is an autonomous constituent of the Republic of Tanzania. It has lost its historical pre-eminence as the trading hub for the East African hinterland, after the revolution in 1964. Efforts to develop and establish an industrial base in Zanzibar have failed dismally. Agro-based industries still hold some promise for investors interested in setting up joint ventures.

 

2. The sharp decline in the international price of cloves also contributed to the economy’s under-performance. Today the GDP is a little over US$ 200mn/- and the economy continues to be in doldrums. The Government on its part has passed a legislation in October, 2004 to attract foreign investments by setting up a one-stop/window clearance for such proposals. Zanzibar, however, lacks in the necessary infrastructure to support industrial projects. There is just one unit making detergent cake bars and two mineral/spring water bottling plants. A new milk processing unit has just come up. A sick sugar manufacturing unit of small capacity has been revived with Indian assistance and an Indian company has established another sugar factory at Pemba.

3. With little or no manufacturing activity, Zanzibar depends exclusively on imports for all its requirements. With a population of about 1.3 million, the market is rather small. Zanzibar’s total imports are in the range of US$ 86mn/-. India however is the second biggest trading partner of Zanzibar where 40% of total import is from India. The import market in Zanzibar holds promise and potential for agricultural and processed foodstuffs and textiles/ garments, bicycles, twowheeler scooters, consumer goods and plastic and rubber products. Our main competitors are from UK and Thailand. China and South Africa are the emerging competitors. Re-exports from UAE also account for a sizeable portion of Zanzibar’s imports. The balance of Indo-Zanzibar bilateral trade is tilted heavily in India’s favour, with Zanzibar’s export (cloves) constituting under 5% of its imports from India.

 

4. The Zanzibar National Chamber of Commerce, Industry and Agriculture (ZNCCIA) has recently been revived with a membership of about 75. ZNCCIA is a nascent organization with virtually no resources to support trade or industry.

 

5. The Revolutionary Government of Zanzibar has set up the Zanzibar Business Council with the President of Zanzibar himself as its Chairman. Unlike ZNCCIA, this body enjoys the backing and support of the Government and therefore, has better resources. This body can be approached, especially for solution of trade disputes, if need be.

 

6. A good number of Zanzibari small-time retailers visit India and bring with them goods (mainly garments, shoes and plastic and rubber products) as part of their personal baggage. This and some more goods smuggled-in by dhows from the UAE and Oman also account for a sizeable portion of Zanzibar’s imports. These do not figure in official trade statistics.

 

7. Bulk of Zanzibar’s imports is made up of foodstuff and textiles/garments. It is however, advisable to check the bonafides of a prospective Zanzibari importer before entering into a commercial deal. Payment should be secured through firm and irrevocable letters of credit, preferably seconded by a multinational bank or the Bank of Baroda / Bank of India, which have their branches in Dar-es-Salaam.

 

8. Zanzibar still lags behind considerably in the field of information technology and majority of importers do not have their e-mail addresses. Many of them do not even have fax links. Indian exporters may therefore, have to correspond with Zanzibari importers through letters.

 

9. Pharmaceutical Council of India’s delegation visited Zanzibar in the year 2014 10. Exports by county of destination as per table below show value of export by country of destination. In 2013 country like India, United Arab Emirates and Singapore were major buyers of Zanzibar exported product. Out of Tanzania shilling 87,799.6 million received on exported product in 2013. Tanzanian shillings 35,489.9 million (40 percent) from India, Tanzanian shilling 18,961.8 (21 percent) from United Arab Emirates countries and Tanzania shilling 13,330.2 million (15 percent) from Singapore.

 

Name and Coordinates of the Commercial Representative in Consulate General of India in Zanzibar:

 

 

Mr. T.C. Barupal,
Consul General
Consulate General of India
8, Migombani, P.O.Box 871,
Zanzibar (Tanzania)
Tel: +255 24 2231904/2232711
Fax: +255 24 2230001
Mob: +255 767605047
cg.zanzibar@mea.gov.in
hoc.zanzibar@mea.gov.in

 

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