In the summer of 2016, Walk Around the World, LLC became a 49% shareholder in Tukaone Projects Limited, a Tanzanian company established to promote economic, agricultural, and educational development in Tanzania. As a result of my experiences with John Mansur Mwakalinga and the Gift of Language School, and John’s tireless efforts to help his country over the last fifteen years, beginning in late 2015, we began to discuss ways to work together on a new development project. After much discussion, planning, and research, we agreed to create TuKAoNe Projects Limited.
The Mission and Purpose of TuKAoNe Projects Limited is to promote economic development and create self-sustainable communities through agricultural projects, educational projects, and by offering financial assistance to local businesses.
The first project is an agricultural project, Tukaone Farms, a rice and maize farm in the area north of Hembeti village. Hembeti is in Mvomero Division of Morogoro Region. Hembeti’s economic activities include fishing, pastoral activities, and agriculture.
Images of the Hembeti area and journey to the Tukaone Projects farm:
Johnny Mansur Mwakalinga, Tukaone Manager described the 15 acre farm near Hembeti Village, Tanzania:
This area now had already been surveyed and had had already a certificate of ownership! We will only need to transfer the title of ownership. The land is more nice here for growing rice and maize, as some part of it has a small hills (high lands) where we could build our farm’s building structures as it is very safe here from water/river flooding – we will always remain safe here. Here it is reachable easily all year.
The source of water is from Dizingwi River which finally pours its water into Wami River. The Dizingwi river has a more clean water and can be used to drink, cook and using the water for taking a bath. It is a river that keeps water for the whole year around. The part of the dry land here is possible for future use in establishing schools and other businesses.
Images of the farm property:
The Hembeti Agricultural Project (Tukaone Farms) Objectives are:
- Acquire full internationally recognized title to the farm the farm land (presently customary right of occupancy)
- Develop the maize/rice farm and begin production
- Develop the means of stocking and selling products
- Use profits to grow the farms and to promote economic, educational, and artistic development in the area
The Hembeti Agricultural Project will have many social and economic benefits, including:
- Employing local Tanzanians;
- Investing profits to help grow the company by buying more land and expanding to processing rice, establishing and assist schools, and improving lives of the locals by providing them with farming and other micro-business loans;
- Local health and nutrition will be improved.
TuKAoNe Projects Ltd. will approach the Hembeti Agricultural Project in six phases:
- Phase 1 (Completed Winter 2016-17): Create and register the Company – this phase involved creating, and registering the business, and planning and drafting a business plan. A Memorandum of Association, Articles of Association, and Registration Certificate from Brella (A registering body in Tanzania) have been prepared, submitted, and approved. The company business plan has been drafted. TuKAoNe Projects Ltd. received its Certificate of Incorporation on January 5th, 2017.
- Phase 2 (Spring 2018): Purchase and receive title to farm land – the former owner of the land, Mama Sara, sold TuKAoNe Projects Ltd. 15 acres of land near Hembeti on Dizingwi River for 16,500,000 TSH (approximately $8,000US). TuKAoNe Projects entered into a purchase agreement with a down payment of $500 US and the final Land Sale Agreement was signed on March 10, 2017 and the land paid for. Due to title issues, the purchase of the original property, near the village of Dakawa, was not able to be finalized, and alternate property was purchased near Hembeti.
- Phase 3 (Summer – Fall 2018): Develop fixed assets/farm infrastructure – building a storage building/office, installing solar power, installing a water pump and irrigation piping, purchasing safety and chemical equipment,etc.
- Phase 4 (Winter 2018 or Spring 2019): Begin production of Paddy/Corn – this will entail seasonal, materials, and labor costs, including purchasing seeds, chemicals, fertilizers, gunny bags, plastic bags, transportation, diesel, and labor involved in preparation for planting, planting, tending the fields, harvesting, drying, and selling paddy.
- Phase 5 (2019 – 2020): Rice/corn processing – after some successful harvests, the project will seek to begin processing the corn and paddy to increase profitability of the operation. Alternatively, more land will be purchased if in the best interest of the Company.
- Phase 6 (2020 and beyond): Expansion – grow the company by using profits to buy more land, expand to establishing schools, providing micro-loans to local businesses, etc.
As any reader of the blog posts will soon realize, creating a business in Tanzania and owning property there is not as straightforward as one could hope. Indeed, part of the purpose of this project is to demonstrate the possibilities for practically any westerner to contribute positively to the economic development of Tanzania as well as show the obstacles and pitfalls of these endeavors. The discovery of the unclear title for the first property Tukaone Projects Ltd agreed to purchase, for example.
No one ever said this effort would be easy. But it is rewarding in ways that few efforts can be.
Walk Around the World, LLC will be a primary source of funding for the project until it is self-sustaining and profitable.
Please check the blog posts to follow developments!
Below is information from the US government:
Tanzania – Right to Private Ownership and Establishment
This information is derived from the State Department’s Office of Investment Affairs Investment Climate Statement.
Tanzanian regulations allow foreign and domestic private entities to establish and own business enterprises and engage in legal forms of remunerative activity. The Business Registration and Licensing Act establishes licensing regulations for business operations. It provides the right to establish private entities freely, to own property both movable and immovable, and to acquire and dispose of property including interest in business enterprises and intellectual property. The Act stipulates that no business entity can enter into business activities in Tanzania before obtaining a business license through the Business Registration and Licensing Agency (BRELA). Registration fees and charges for foreign companies are significantly higher than for domestic companies. The government is now implementing the Business Activities Registration Act of 2007, which aims to reduce administrative barriers with one centralized licensing database.
Land ownership remains restrictive in Tanzania. Under the Land Act of 1999, all land in Tanzania belongs to the state. Procedures for obtaining a lease or certificate of occupancy can be complex and lengthy, both for citizens and foreign investors. Less than 10 percent of land has been surveyed, and registration of title deeds is currently handled manually, mainly at the local level. Foreign investors may occupy land for investment purposes through a government-granted right of occupancy (derivative rights), or through sub-leases through a granted right of occupancy. Foreign investors can also partner with Tanzanian leaseholders to gain land access.
Under the Tanzania Investment Act 1997 and the Land Act of 1999, occupation of land by non-citizen investors is restricted to lands for investment purposes. Land can be leased for up to 99 years, but the law does not allow individual Tanzanians to sell land to foreigners. There are a number of opportunities for foreigners to lease land, including through TIC, which has designated specific plots of land (land bank) to be made available to foreign investors. Foreign investors may also enter into joint ventures with Tanzanians, in which case the Tanzanian provides a lease over the land. The GOT plans to expand TIC’s land bank and modernize its land titling and registration system, though both changes are long delayed in execution.
Secured interests in property, both movable and real, are recognized and enforced under various laws in Tanzania. There is no single comprehensive law to secure property rights. Though TIC maintains a land bank, restrictions on foreign land ownership can significantly delay investments. Land not already processed for investment in the land bank has to go through a lengthy review and approval process by local-level authorities, as well as the Ministry of Lands, Housing, and Human Settlements Development and the President’s Office, in order to be officially re-designated from village land, with customary rights of occupancy, to general land, which can be titled for investment and sale.
The Ministry of Lands, Housing, and Human Settlements Development handles registration of mortgages and rights of occupancies. The Office of the Registrar of Titles is responsible for issuing titles and registering mortgage deeds. Title deeds are recognized as a mortgage for securing loans from banks. Traditional Certificates of Occupancy for village land are still being piloted for use as collateral, and this is currently limited to groupings of village-level borrowers. In the category of Registering Property, Tanzania ranking has fallen six places from 117 in 2014 to 123 in the 2015 World Bank’s Ease of Doing Business report.