The Government of Tanzania has released a statement that the country is a safe place to stay and invest and recent alarming news should not shake their confidence in the state.
The Parliament has moved with speed to address the security concern following the abduction of Tanzanian businessman and former politician Mohammed Gulamabbas Dewji.
The kidnapping of the business tycoon took place on Thursday, October 11, 2018, reportedly went into the Colosseum Hotel in Dar Es Salaam and came out with a person. Dewji was abducted at 5 AM as he walked into a gym in the hotel for his routine morning workout. The shocking news had caused some fear for potential investors in the town.
The Minister of Home Affairs, Kangi Lugola convinced the residents of the town the place is safe to stay and an attractive destination for business investments. He said the security department is doing all it can to ensure the environment is safe to ease any tension caused by the news. The security department will ensure safety within the country as well.
“The recent incident has shocked every one of us, but in another way, it has provided us a chance to improve our strategies on maintaining security. I want to assure investors that the country is still a safe place to invest and stay.” He remarked. The security level of a country is a paramount strategy to keep and lure more businesses.
Political instability was another critical area Mr. Lugola highlighted that could scare investors away. Unstable environments are likely to freeze the hands of investors due to fear of loss of business or return on investments. The empirical study of the matter has linked economic growth to political stability that gives investors assurance of their ventures.
Political instability also leads to higher inflation and reduces growth rates significantly. To some extent, political instability weakens the share of investment in GDP. It limits the performance of a country’s economic prowess which could be a considerate factor in shutting the doors for the flow of foreign direct investments.
Tanzania, a nation that significantly relies upon FDI to steer the economy need to tighten its grip in security to offer hope for future investments. It is among the preferred destinations for foreign investment in Africa and still among the 10 biggest recipients of FDI in Africa.
According to the UNCTAD 2018 World Investment Report, in 2017 the inflow amounted to $1.18 billion which accounted for 2.3% of the national GDP. The figures were however down by 13% in comparison to the previous year when it attracted an estimated $1.35 billion. An unsound business environment was criticized by the analysts as the FDI inflows decreased for the past three years, earlier this year.