2006 TRADE FAIR REFLECTS STRONGER U.S.-TANZANIAN

UNCLAS SECTION 01 OF 02 DAR ES SALAAM 001175

SIPDIS

SIPDIS

DEPT EF/CBA FOR D WINSTEAD AND EB/EX
DEPT ALSO AF/E FOR B YODER AND AF/EPS FOR T HASTINGS
NAIROBI FCS FOR E YAGI

E.O. 12958: N/A
TAGS: BEXP ABUD AMGMT ECON EINV ETRD PREL TZ
SUBJECT: 2006 TRADE FAIR REFLECTS STRONGER U.S.-TANZANIAN
TIES

REF: DAR ES SALAAM 00114

SUMMARY
--------------

1. The 2006 Dar es Salaam International Trade Fair (DITF)
revealed the Government of Tanzania's (GOT) efforts to
gradually transition away from a "shopping mall" atmosphere
toward a genuine international trade show. While there
remains a long road ahead before the DITF, which ran from
June 29 through July 9, becomes either a fully functioning
trade show or truly international, the intention to create a
more business-oriented environment was evident. President
Kikwete inaugurated the annual festivity with a speech that
emphasized commitment to cut the cost of doing business in
Tanzania and to promote export-led economic growth. The
increasingly warm bilateral relations between Tanzania and
the U.S. were "on display" with President Kikwete mentioning
the African Growth and Opportunity Act (AGOA) several times
during his speech and taking an in-depth tour of the U.S.A.
pavilion, which won first prize as the best foreign
exhibitors. END SUMMARY.

From Bargain Bazaar To International Trade Show
-------------- --------------

2. The 30th Dar es Salaam International Trade Fair (DITF)
was widely praised by the GOT as a successful event,
attracting more than 400,000 visitors over a two week time
span. The fair, organized by the Board of External Trade
(BET),had noticeable improvements compared with previous
years including, an increase in the number of local and
foreign exhibitors (over 1500 total),a higher standard of
maintenance at the fair grounds, and reduced congestion of
both pedestrians and vehicles inside the grounds. By raising
the price of admission per person and per car by 100 percent,
BET created a more business-oriented atmosphere. The
Minister of Trade, Industry and Marketing (MITM),Nazir
Karamagi, confirmed this effort, telling Econoff on July 7
that MITM's goal is to move away from a bazaar-type
"festival" toward a "truly international trade fair." While
the GOT still has work to do before the DITF could be
considered a world-class trade show, this year's event
indicated steps in the right direction by trying to limit the
number of casual shoppers and attract legitimate business
persons.

U.S. Pavilion Wins First Prize
--------------

3. The Embassy organized a U.S.A. pavilion at the 2006 DITF.
Only twelve other foreign exhibitors organized similar
pavilions: Botswana, Burundi, China, Kenya, Egypt,
Mozambique, Nigeria, South Africa, Syria, United Arab
Emirates, Uganda and Zimbabwe. The U.S. pavilion showcased
the following companies and organizations:

-- U.S. Embassy Information Resource Center
-- Foreign Commercial Service from Nairobi
-- African Growth and Opportunity Act (AGOA)
-- Kickstart (USAID partner)
-- TechnoServe (USAID partner)
-- DAI Pesa (USAID partner)
-- Caltex
-- Colgate-Palmolive
-- World Initiative for Soy and Human Health (WISHH)
-- Elite Computers - distributors of Apple computers and iPods
-- SSTL Security Group
-- Goodyear Tires
-- Nufaika - distributors of Proctor and Gamble products
-- Junior Achievement


4. Due to its attractive variety of displays, unified theme
and sound layout, the U.S. pavilion won first-prize for best
foreign exhibitor. President Kikwete presented this award to
Ambassador Retzer on July 4 during the official DITF
inauguration. The prize not only boosted the morale of the
U.S. exhibitors, but also encouraged President Kikwete to
tour the U.S. pavilion himself after the awards ceremony.
Although expected to be a cursory walk-through, President
Kikwete ended up spending more than 20 minutes in the U.S.
pavilion, asking detailed questions of the participating
firms about the wide range of products and projects on
display.


DAR ES SAL 00001175 002 OF 002


Kikwete Urges Export-Led Growth
--------------

5. In his inauguration speech at the 2006 DITF, President
Kikwete emphasized his commitment to making Tanzania "more
business friendly." He expressed his dissatisfaction with
Tanzania's relatively poor ranking on the World Bank's "Cost
of Doing Business" index and said the GOT was fully aware of
the problems hindering business such as bureaucratic
red-tape, nuisance taxes, poor infrastructure and unreliable
power. Urging the business community to "prod" the GOT,
Kikwete promised to work in partnership with the private
sector to address these lingering impediments to economic
growth.


6. Promoting export-led growth was a key theme President
Kikwete stressed in his speech, noting that in 2004, trade
contributed about 17 percent to Tanzania's GDP. Kikwete
urged Tanzania's business community to use the DITF as an
opportunity to explore creative marketing strategies and
secure new export markets. He emphasized the upcoming
opportunities soon to be offered through Export Processing
Zones (EPZ) and Special Economic Zones (SEZ). Kikwete twice
referred to the Africa Growth and Opportunity Act (AGOA) and
mentioned Europe's Everything But Arms (EBA) as critical
opportunities yet to be fully exploited by Tanzanian
producers.

U.S.-Tanzania: DITF Reflects Strengthened Ties
-------------- -

7. COMMENT: The DITF encapsulated the double-sided coin
that is Tanzania's business environment: on one side the
trade fair exposed obvious flaws ranging from the unfortunate
waft of smelly garbage, to unreliable power supply even in
the main exhibit halls; on the other side were signs of great
potential ranging from beautiful handicraft displays to
reports from U.S. partners on the valuable brand promotion,
contacts and orders secured through participation in the
Fair. The GOT made obvious efforts to upgrade the 2006 DITF,
in-line with the Kikwete government's overall agenda to
improve Tanzania's business climate. President Kikwete's
overall enthusiastic participation in the Trade Fair and keen
interest in the U.S.A. pavilion underlined his support for
more business friendly policies and highlighted the
increasingly warm bilateral relationship between Tanzania and
the United States. As a result of his May 2006 trip to the
U.S., Kikwete appears increasingly determined to exploit AGOA
and to attract serious U.S. investments to Tanzania. END
COMMENT.
RETZER