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Tanzania went through an election in late 2010 and as with every election the disruption to investments and the internal economy is significant. Firms note that prior to the election there was a mini run on the banks with companies taking Tanzanian shillings out of the country for a few months....

Tanzania went through an election in late 2010 and as with every election the disruption to investments and the internal economy is significant. Firms note that prior to the election there was a mini run on the banks with companies taking Tanzanian shillings out of the country for a few months.

"Last year was an election year so there was a slowdown and the people were taking money out of banks - the shilling is a weak currency, a bit unstable and very weak at the moment against the US dollar, it is at a 45 year low and having an impact on importers," says one partner.

Despite this there has been a relatively consistent level of activity and the government has been making an effort to attract further investment and better structure the investments.

The country is seeing activity in the mining and oil & gas sectors. "The mining sector is picking up, there is a national natural resources steering committee headed by the prime minister as a way of attracting big investments and offering sweeteners to investors for big projects," says a local lawyer.

A new mining act in November 2010 "allows the government to participate in mining interests with investors and gives the government a stake of 5% – 20% in projects," says a partner, who adds that "the mining group would also ultimately have to give shares to the public, but it is very negotiable". The Act also introduced new tax breaks in various sectors. "As a result, some areas are very busy and there are a number of new clients in copper concessions in the west of the country," says a partner.

In oil and gas, additional offshore hydrocarbon reserves were discovered to supplement the existing producing Songo Songo gas field and the Government has claimed that there could be enough natural gas to supply the entire East African region. The discoveries have increased activity in the energy sector with players such as BP, Tullow Oil and Halliburton establishing a more permanent presence.

Another development has been the real estate boom in Dar es Salaam, a trend also noted in neighbouring countries. As in Kenya, the boom is not completely based on demand and there are suggestions that a market correction may be on its way.