- President Samia has doubled down on business and investment in Tanzania
- Tanzania has adopted a new tone towards foreign direct investment
- Tanzania is striving to become the best tourism hotspot in Africa
As a lower-middle-income country, Tanzania is putting in a considerable amount of work to build itself towards attaining its industrial revolution objective.
The industrial driven economy mission and energy inspired by the late President John Magufuli has spilt over to the incumbent presidency – under Samia Suluhu Hassan.
Over the past six years, Tanzania has taken tremendous steps towards achieving its primary objectives, including upgrading its economic status, which was done swiftly and within time.
With the entire globe faced with uncertainty propelled by the COVID-19 pandemic, Tanzania has remained relatively stable and accommodative to crucial sectors of the economy, such as banking by improving money supply and credit, information and communication, as well as agriculture.
Despite inflation being slightly higher at 4.1 per cent for November 2021 than 3.9 per cent in the third quarter in 2021, Tanzania is standing strong and striving to run the number down by securing a stable supply of necessary items.
Tanzania has positioned itself as the most hospitable, accommodative, and attractive spot for investment, business, and tourism over the past six months. It is correct to say Tanzania has strategically reinforced its economic quest, which marks it as a fierce competitor among East African nations.
Standing on a 4.3 per cent GDP (Q3) and hosting nearly 60 million people according to Tanzania’s National Bureau of Statistics, the nation is up for a challenging but successful mission ahead.
Several underlying scenarios are of paramount importance, as they pinpoint Tanzania’s dedication and uncompromising commitment to achieving its goals.
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Business and Investment
In her first 100 days in office, President Samia brought improvement to the country’s business and investment environment.
In December 2021, President Samia launched a robust energy product factory, Elsewedy Electric East Africa Ltd, in Dar es Salaam. The factory is one of a kind in the region, which marks Tanzania as one of the countries that exports high-end 15,000 tonnes of copper wire, 1,500 transformers and 100,000 electric meters annually (Daily News).
Previously, during President’s Magufuli’s administration, investment relations were recorded to be a bit strained, as many critics found Tanzania not investment-friendly.
Pinning numbers to the matter, by using World Bank’s key metrics, Tanzania ranked 141 out of 190 in the rank of doing business in 2020. However, according to the US Department of State, foreign direct investment increased from $938 million in 2017 to $1.1 billion in 2018.
In April 2021, President Samia ordered a transformation of the investment sector in her quest to boost business and investment by changing unhospitable terms and paving a new path for equitable and friendly policies.
The President addressed various business and investment thorns, including bank loans. She added, “Bank loan interest rates are between 12 and 19 per cent. These rates are very high for the average person”. She asked the central bank of Tanzania (BoT) to work on this and emerge with appropriate solutions (Daily News).
President Samia’s presidency extended the same concern across East Africa to Uganda, Kenya and Rwanda. Her visit to Kenya was fruitful, as both heads of state resolved chronic bilateral trade issues and ended up setting a foundation for developing a concrete solution.
“The One Stop Centre would remove all kinds of bureaucracy and corrupt practices. We have to clear the perception among foreign investors that our country is unpredictable,” she added.
With regional business problems resolved and new investments laid down, including signing seven Memorandums of Understanding (MoUs) on crucial areas, which build the two countries’ relations, nothing can stop Tanzania.
The president’s new investment strategy brought Africa’s wealthiest man, Alhaji Aliko Dangote, into the picture. Dangote has invested in a cement factory in southern Tanzania, and declared he will continue to invest in Tanzania to raise the well-being of the people by creating more jobs. Dangote’s cement factory had faced some investment hurdles over the past years. The positive tone by both parties signifies Tanzania’s commitment to investor relations.
READ: Tanzania Cement Industry: It has double production in decade | Tanzania cement market.
Construction
There is nowhere you will find undeveloped structures, whether it is roads, government buildings, or communication structures. From the almost completed Tanzanite Bridge interconnecting the nation’s commercial capital to the energy transformation Nyerere Dam, Tanzania is unstoppable.
Over the past decade, Tanzania has taken the important role of construction in pinning itself towards the centre of becoming the most attractive and accessible economic hub.
From international airports to international train stations, Tanzania is covering it all. There are underlying factors why we should not look at construction as an activity but as a strategy that Tanzania wields for power play.
According to BoT’s Q3 economic bulletin, construction was the top activity that contributed to GDP in 2020. Since then, the sector has been given serious priority as quintessential benefits are seen through the easy access of people from various countries to Tanzania be it the nation’s carrier or international airlines, inter-regional accessibility, and movement of goods from Tanzania to landlocked countries.
The Standard Railway Gauge (SGR) is a system under construction that links neighbouring Rwanda and Uganda, and through Burundi and the Democratic Republic of Congo (DRC)—a great example of how Tanzania has transformed itself from a construction angle. The new 2,561kilometer railway will reduce road congestion (contributed by cargo-carrying-lorries) and freight costs by 40 per cent. Each freight train will transport up to 10,000 tonnes, equivalent to 500 lorry-loads (Construction Review Online).
READ: Report Insight: How Tanzania economy closed off 2020
The SGR project, which is undergoing the construction of phases per section, marks Tanzania on the world map as one of Africa’s most accessible economic hubs. The first phase project from Dar es Salaam (economic pulse of Tanzania) to Morogoro is 99 per cent done. The second phase stretches a 420Km power transmission line with 220kV from Morogoro to Makutupora in the Dodoma region at 51 per cent completion.
In January, former foreign minister Palamagamba Kabudi noted that China Civil Engineering Construction (CCEC) and China Railway Construction Company (CRCC) won a tender to construct phase 5 from Isaka to Mwanza, costing $1.3 billion for 341 km of railway.
As construction promotes technological advancement and job creation and draws in sustainable investment over time and space, socio-economic growth is also essential for Tanzania.
Since 2015, the country has been striving to shrink economic inequality by offering incentives to all individuals to pursue economic aspirations. With strategic projects such as Rural Electrification, water projects and building strategic infrastructures to peripheral areas, Tanzania stands to draw billions within its borders.
