DHL sees rising trade potential in Tanzania

JOHANNESBURG: TANZANIA is steadily establishing itself as a key trade and investment destination in Africa.

Long regarded as a logistical bridge between the eastern and southern regions of the continent, the country is now gaining recognition for both its improved infrastructure and home-grown innovations that are reshaping trade dynamics.

According to the United Nations Conference on Trade and Development (UNCTAD), Foreign Direct Investment (FDI) in the country rose by 28.3 per cent in 2024, reaching 1.72 billion US dollars.

Ranking Tanzania 11th in Africa by FDI volume and 13th by annual growth rate.

At the heart of this transformation is a combination of deliberate public investment and growing private sector involvement in logistics and supply chain development.

From roads and ports to rail corridors and warehousing, Tanzania’s logistics backbone is evolving, allowing goods to move more efficiently within the country and across its borders.

DHL’s Managing Director for Supply Chain Africa and Chief Commercial Officer for the Middle East and Africa, Bremer Pauw, has seen this change take shape.

Based on his regular visits over the past four years, he notes that the difference is not just in infrastructure but in the atmosphere of business activity and potential.

“If you go to Dar es Salaam today and you haven’t been there for the last five years, it would look like a different city,” he told Daily News.

“There’s been real, visible progress. And in Arusha, I was struck by how much opportunity is still ahead, especially in sectors like agriculture and tourism.”

Agriculture, in particular, stands out as a sector with immense potential. Tanzania benefits from fertile land, consistent sunshine and a climate that supports multiple harvests in a year.

Yet, for decades, farmers have faced challenges getting their goods to markets both domestic and international without significant post-harvest loss.

DHL, traditionally known for its express parcel services, has increasingly moved into supply chain and logistics solutions tailored to African contexts.

One such solution, an agritech packaging innovation developed on the continent and believed to have originated in Tanzania, is now being rolled out globally.

The concept is simple but powerful: allow farmers to send samples such as six avocados to overseas buyers in specialised packaging that preserves freshness and allows for quality inspection before committing to a bulk export.

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“It was developed in Africa and it’s now actually part of a product that we sell to the rest of the world,” said Pauw.

This model helps reduce waste and ensures that perishable goods are only harvested and exported once a buyer has confirmed acceptance.

For small and mid-sized farmers, who often can’t afford the risk of sending large, unsold shipments, it opens access to global markets and more secure trade.

“The moment you take an avocado off the tree, it starts becoming ripe,” Pauw explained.

“Take a few, put them into an agritech container, send them to the market, get confirmation and then start picking. That’s the kind of thinking we need to reduce waste and increase value.”

The solution addresses a much broader issue facing African agriculture: the high level of spoilage due to inadequate cold chain systems and transport delays.

According to estimates by the Food and Agriculture Organisation (FAO), postharvest losses in Africa can reach up to 40 per cent for fruits and vegetables, 20 per cent for cereals and 30 per cent for dairy and fish.

These significant losses are largely attributed to inadequate storage facilities, poor handling practices and insufficient transportation infrastructure.

Such challenges result in a substantial proportion of fresh produce spoiling before it can reach markets, undermining food security and reducing income for farmers across the continent.

Pauw believes logistics providers have a critical role to play in reversing this trend.

“The percentage of waste in Africa’s supply chain due to us not getting to the market quickly enough is very high,” he said.

“Our network enables that trade whether that’s a mining company sending samples or a farmer selling avocado’s,” he added.

Beyond innovations, Tanzania’s improved transport infrastructure is helping drive growth.

Key corridors linking Tanzania to Zambia, Uganda, Democratic Republic of Congo, Rwanda and Burundi are now busier than ever. Pauw pointed to the increased number of trucks on these roads as a sign of growing trade volume and demand.

“If you drive on the roads, you can see the investment happening. The trucks are there; the traffic is there and that means trade is happening.”

Still, challenges persist particularly at the borders. While some optimisation has taken place, cross-border trade remains too dependent on paperwork, which slows down the flow of goods and increases costs for traders and transporters.

“Like many other African markets, I think we still have a way to go in terms of optimising cross-border trade and making it less paper-intensive than it is today,” Pauw said. “Digitisation will be key.”

A major area of future potential lies in rail freight. While roads currently dominate the movement of goods across the region, rail is widely recognised as a more cost-effective and environmentally friendly alternative especially for heavy or bulk cargo.

Tanzania is already linked by rail to Zambia and South Africa, but those corridors remain underutilised.

“Where volume exists, you’ll find investment whether public, private or a mix of both,” Pauw noted. “That’s how rail becomes commercially viable.”

He pointed to mining operations in southern Africa as an example. In several cases, companies have worked with governments or invested directly in rail infrastructure to ensure reliable transport of minerals to ports.

“As you say, it makes commercial sense on a longterm principle to move away from road to rail.”

For Tanzania to see similar developments, there must be predictable trade volume and a business case for long-term investment. That includes growing exports, reducing inefficiencies and ensuring clear coordination between public authorities and the private sector.

This effort is closely linked to broader continental trade goals, particularly the African Continental Free Trade Area (AfCFTA), which aims to create a single market for goods and services across Africa. Pauw is cautiously optimistic about the potential of the agreement, but insists that the on-the-ground reality must catch up to the ambition.

“Africa needs more voices to demystify the way in which we trade,” he said. “Each market is so unique, with different laws and regulations. But if we can simplify that message, it will bring more volume in and out of Africa.”

He argues that Africa is often misunderstood by international investors, who may see risk but overlook the long-term rewards. The private sector, especially companies already operating on the ground, can play a key role in changing that narrative.

Looking ahead, Pauw sees strong potential in Tanzania’s growing economy and evolving trade landscape.

“There are still a lot of companies that haven’t entered the Tanzanian market yet,” he said. “That speaks volumes about the opportunity that still exists.”

With continued investment in infrastructure, support for innovation and a commitment to improving trade processes, Tanzania is on a clear path toward becoming a stronger, more influential player in African and global trade.