Tanzanian President Dr. Samia Suluhu Hassan recently completed a three-day visit to Indonesia from January 24-26, 2024.
The visit concluded with the signing of seven strategic agreements between Tanzania and Indonesia, covering various sectors including diplomatic cooperation, trade, and education.
These agreements, witnessed by President Hassan and the President of Indonesia Joko Widodo, include four Memoranda of Understanding and one letter of intent for investment promotion and facilitation.
They aim to strengthen the 60-year diplomatic and economic ties between the two nations, with a focus on enhancing trade and investment relations.
Key areas of cooperation include the oil and gas sector, with Indonesia’s Pertamina increasing its stake in Mnazi Bay, Mtwara, and potential investments in agriculture and energy by Indonesian companies ESSA and Medco Energi.
The agreements also cover the blue economy, agriculture, pharmaceuticals, and minerals.
In the pharmaceutical sector, the main focus is on Indonesia selling drugs to Tanzania, initially starting with cancer medications. Indonesia will also invest in Tanzania through its pharmaceutical companies to boost the country’s health services.
Other agreements include the collaboration between the Tanzania Trade Development Authority (TANTRADE) and PT Perusahaan Perdagangan Indonesia, the University of Dar es
Salaam and Institute Teknologi Bandung, the Tanzania Chamber of Commerce, Industry, and Agriculture (TCCIA), the Zanzibar National Chamber of Commerce (ZNCC), and the Indonesian Chamber of Commerce and Industry (KADIN).
Tanzania has set a target of USD 1 billion in FDI from Indonesia by 2030, emphasizing its strategy to become a key investment destination in Africa and globally, and aims to attract up to USD 15 billion annually in Foreign Direct Investment (FDI) by 2025.
Simultaneously to the State visit, on January 25th the Tanzania-Indonesia Investment and Business Forum was also held in Jakarta to facilitate dialogue among over 300 participants from both countries.
The forum covered sectors such as tourism, agriculture, pharmaceuticals, manufacturing, transport, logistics, fisheries, and aquaculture. Outcomes included the decision to create investment opportunities in specified sectors, the establishment of a Joint Business Council to support trade and investment, and for Tanzania to export beef, coffee, minerals, and avocados to Indonesia.
The Tanzania Investment Centre (TIC), represented by Executive Director Mr. Gilead Teri, played a significant role in these investment discussions. TIC emphasized the importance of these agreements in attracting investments, particularly in strategic sectors such as agriculture, livestock, and the blue economy, and expressed its readiness as a legally empowered entity to facilitate and promote investments resulting from these agreements.
The Tanzania Private Sector Foundation (TPSF) also contributed to these discussions, focusing on the growth potential of the private sector.
Tanzania and Indonesia Trade
According to Tanzania’s Ministry of Finance, the total trade value between Tanzania and Indonesia in 2021 was USD 490.2 million.
Indonesia was Tanzania’s 4th largest trading partner that year. Tanzania exported USD 55.7 million worth of goods to Indonesia in 2021, mostly tobacco, spices, textiles, and timber. Tanzania’s imports from Indonesia in 2021 totaled USD434.5 million, including palm oil, medications, paper, and rubber products.
In August 2023, Indonesia’s President Widodo made a visit to Tanzania which lculminated in the signing of several pivotal Memoranda of Understanding with the government of Tanzania.