I’ve been on the ground in Tanzania for about two and a half weeks now. My family came a week later than me and have been here 10 days. We’re all happy and healthy, and over the jetlag. Upon entry you complete a fairly lengthy health declaration, have your temperature taken and are questioned by health officials. But there is no quarantine or Covid-19 testing.
(If you are wondering why, and have not done so yet, watch this speech by President Magufuli.)
Coming here for the launch of my African Lions Fund, and bringing my family with me, to escape the Covid-19 madness in Asia and Australia was the best thing I’ve done all year. It’s great to be living normally, free to do what we like, with no restrictions or lock down policies based on dubious science and a lack of any concrete evidence.
After a couple of weeks staying at the Protea Courtyard by Marriott downtown, which was both economical and friendly, with great food in the restaurant (including grilled lobster for about US$24), this week we rented a beachfront villa at Kunduchi Beach.
Kunduchi is on the northern outskirts of Dar es Salaam. We’re in a two-bedroom, two-story self-contained place at Azure Boutique Resort (photo on the right).
It works out to below US$90 per night. It sleeps six. (We are five, as my wife’s younger sister is also traveling with us). The manager is Italian, and I have been enjoying some Italian food, as well as excellent fresh local seafood. Kunduchi Fish Market is famous.
Tanzania may be open, but most countries are still advising their citizens against traveling anywhere. Many countries are also imposing quarantine conditions on residents returning home from overseas. So, there’s some hard ground to plough for places such as Tanzania for the foreseeable future when it comes to their tourism industries. Thailand, and Bali, will be in the same boat if and when they decide they can’t take the economic pain anymore and open up.
If you have the flexibility to travel at short notice, and like me, are seeking some freedom and respite from the constant barrage of coronavirus propaganda that passes for news in many countries, with live case counts and death tickers running across the screen – as though it were an Olympic medals tally – you could do a lot worse than hopping on a plane to Dar es Salaam, or Zanzibar. I’m not the only one saying that. Britain’s Daily Telegraph recently reported the same thing.
Meanwhile, as I always do, I have been running my businesses and writing from here, just like I would normally do at home. Internet is fast and reliable. There was a power interruption on Saturday, but nearly all places have back-up generators, so it proved no issue.
Incidentally, that was the first time I can recall experiencing a power outage in all of my four extended visits to Tanzania over the past two years.
As well as meeting brokers, bankers, and custodians, in relation to the set-up and launch of African Lions Fund, over the first two weeks here, I had occasion to meet with the CEO of one of the country’s leading fuel companies. I also met with the CFO of a local investment company I am personally invested in, and I had lunch with an expat British lawyer who practices in Dar es Salaam. I also attended a networking function sponsored by his firm. The mood is positive.
There is a story about Roald Dahl, the children’s author. He was stationed in Dar es Salaam before WW2, in 1939 as an executive with Shell Oil. The story is that seeing Twiga’s plant on the horizon (photo in the center) inspired Charlie and the Chocolate Factory
Just like the US, it is election season in the third quarter of 2020 in nine African countries, including Tanzania. Election campaigning is in full swing. But the election here is nothing like the circus they have in the USA.
President Magufuli is heavily favoured by most people to win in a landslide, on October 28. His accomplishments over his first five-year term in the fields of economic management and infrastructure building have been impressive. Some don’t like his strict disciplinarian ways, and occasional tendency to act in an impulsive, authoritarian manner. But on the whole, I think people can see he has been positive for the country and helped to advance economic development.
However, far from resting on his laurels, the message I am getting is Dr. Magufuli wants to accelerate reforms and get things moving faster in his second term. One of the senior executives I met with, referred to above, thinks there is a good chance that monetary and fiscal policy will be loosened after the election.
I agree this could definitely be on the cards. As things stand, the economy is already enjoying good growth, above 5% for this year, even amid the pandemic. As I have written before, gold exports are doing extremely well. In recent weeks it also emerged that the all-important cashew nut harvest looks like being up 30% from last year.
There is even a scramble underway to ensure there is adequate packaging available for the crop. Cashew nuts are one of Tanzania’s main agricultural export earners, usually vying with coffee for the number one spot.
One of the government’s development goals is to try and add value to raw materials and agricultural produce locally, before exporting them. For the longest time, Tanzania’s raw mineral ores and agricultural produce have been purchased cheaply by traders and middle-men and sold abroad for processing. In the value-added chain it is thus the traders that capture the lion’s share of the mark-up.
With cost-effective importation of capital equipment from places such as China and Vietnam to process raw materials and primary produce, which is now being pursued, the economy can continue to expand at rates well above population growth and enhance GDP per capita.
For entrepreneurs, I see a wealth of opportunities here. But my beat is listed equities. There too, as I have stated before, opportunities to buy wonderful businesses at under fair prices abound.
That’s what African Lions Fund is designed to do. I’ll be starting to invest the fund’s capital tomorrow, October 1. Between 50 and 60 people, who share my vision, have already invested. Each month we can allot new shares, so more investors are always welcome.
If this is your first time reading about the fund, you can find relevant information such as minimum investment, paperwork requirements, submission forms, etc., on a dedicated website for the fund: www.africanlionsfund.com. Just register a free account, go to the My Account page and you’ve got all the details you need.
If you have been following my journey launching this fund and you’re interested but still on the fence, or just prefer to sit on the sidelines, you can also join my new African Lions Fund Telegram channel.
There I share more photos and stories about my experiences and daily life in Tanzania – as well as intelligence gathered from my network of contacts, and news about companies I’m investing in or which are on my watchlist.
While Tanzania is the brightest star at the present time, having stayed open for business during the pandemic, many more African countries should see impressive GDP growth over coming decades, driven among other things by a huge demographic dividend. One of them is the so-called “Singapore of Africa,” which I wrote about here.
There’s a whole new world out here and as the West and rest of the world tries to embark on a long recovery process from the pandemic, and the own-goals scored by ham-fisted policy responses, countries here are flourishing and moving upward and forward. I plan to be here long-term to capture the opportunities, just as I did in Asia in an earlier stage of my career, when it was the global leader in economic growth.
Until next time,
Global Value Hunter