- In the year before Samia’s administration, Tanzania’s FDI closed 2020 at $3.16 billion though the Covid-19 pandemic might have impacted the inflows.
- Between March 2021 and February 2023, the number of registered funded projects rose from 455 to 575, equivalent to a 26 percent increase.
- Investment expansion in Tanzania trickled down towards the community during the period under review, and job creation grew from 61,900 to 87,187.
Over the past six years, Tanzania investment sector has gone through a somewhat cyclic pattern. Former President John Magufuli’s polices were deemed unfriendly by investors forcing capital to flee to more predictable and profitable markets.
However, in the last two years, there has been a wind of change brought about by President Samia Suluhu who has taken a pro-business approach focused on improving international business and diplomatic relations in the region and across the world.
According to data from Tanzania Investment Centre (TIC), the amount of money invested in Tanzania shot to around $8.64 billion during the past two years – the period President Samia shifted Tanzania’s bilateral trade and international relations strategies.
In the year before Samia’s administration, Tanzania’s FDI closed 2020 at $3.16 billion though the Covid-19 pandemic might have impacted the inflows.
The recent success within Tanzania’s investment sector stems from several hurdles, including a marked decrease in investment from 2015, with FDI inflows dropping by a third, according to EU Investment in Tanzania report 2022.
Further, the EU report pointed out that during the period mentioned, the number of new businesses registered in the country also dropped by a third.
However, between March 2021 and February 2023, the number of registered funded projects rose from 455 to 575, equivalent to a 26 percent increase.
Further, the TIC report, pointed out a few interesting facts. Projects recorded under the new administration stood at 32 percent Tanzanian owned, 41 percent for those owned by foreigners and 27 are joint ventures between local and foreign investors.
This shows that Tanzania needs to bring more actors in the sector missing serious investment opportunities, especially with other investment destinations such as Rwanda (Visit Rwanda strategy) and Kenya sharpening their sectors.
Consequently, investment expansion in Tanzania trickled down towards the community during the period under review, and job creation grew from 61,900 to 87,187.
READ: Tanzania’s New Investment Act: “Same – Same but Different”
Invest in Tanzania
Tanzania’s vast investment opportunities are garnering international attention. Since 2022, various international players have been interested in Tanzania’s profitable sectors especially mining, services, agriculture and tourism.
The United States and European Union (EU) have increased their interaction with Tanzania following President Samia’s charm offensive to demonstrate that Tanzania is open for business.
Earlier this year, more than 600 investors and business leaders from the 27-member EU gathered for a mega business forum in Dar es Salaam seeking to capitalise on Tanzania’s current pro-business policies to boost investment and trade between the East African nation and Europe.
EU head of delegation to Tanzania, Mr Manfredo Fanti, recognized efforts made by Tanzania to bolster international relations and promote foreign direct investment inflows (FDI).
“There have been a number of positive signals from the government to the private sectors with regard to a framework for business, and there are expectations for legal and regulatory reforms in order to improve the sector. We therefore thought this is the right moment to do this kind of an event,” Fanti said.
READ :Unlocking investment opportunities in Tanzania
In September 2022, at least 19 US companies – with a total market capitalization of over $1.6 trillion – visited Tanzania on a two-day fact-finding mission.
The companies participating in the mission included Abbott Laboratories, Alliance One Tobacco Tanzania Limited, Baker Hughes, Becton Dickinson, Burn Manufacturing, Citi, Coca-Cola, FAS Authentication, GE and Hid Global and others.
Further, the companies were joined by the US Agency for International Development representatives, the US Commercial Service Liaison to the AfDB, the US Department of Commerce, the US Department of State and the US Trade Development Agency.
The firms explored opportunities in mainland Tanzania and the Isles, particularly agribusiness, energy, healthcare, infrastructure, ICT and manufacturing.
This fact-finding mission brought necessary attention to the investment space, painting a positive picture of the nation’s business sphere and strategically linking the private sector and government.
More importantly, the sector has experienced growth in various spheres. For instance, more investments in the last two years are industrial production by 49.43 percent, construction of commercial buildings by 17.51 percent and transportation by 11.07 percent.
The TIC report depicted that a 26-percent increase in investment by local investors was attributed to incentives offered to domestic investors.
“The Centre (TIC), in collaboration with Regional Commissioners’ offices and embassies, has continued to encourage domestic and foreign investment,” a part of the report mentioned.
Further, the report brought forth Tanzania’s ability to withhold investor interest during the strong challenges of the pandemic.
“Despite the Covid-19 pandemic, investors kept on flowing into the country, thanks to a friendly business environment and an enabling infrastructure like roads, railways, ports, airports and power,” the report stated.
Addressing the report, the Tanzania Chamber of Commerce, Industry and Agriculture (TCCIA) executive director Nebart Mwapwele explained that the increase in the value of registered projects is a positive move that will fuel the growth of the country’s economy.
READ:Tanzania seeks investment to curb cooking oil shortage
“This will stimulate money circulation and boost value addition in locally produced products, and that is why various countries are doing whatever they can to attract investments,” Mr Mwapwele told The Citizen by phone.
On the other hand, acting chief executive officer Raphael Maganga, Tanzania Private Sector Foundation (TPSF) argued that the improvement in the Investment Act and policies triggered the promising performance.
“It means a lot to the private sector and the country at large,” said Mr Maganga, adding: “This positive development has a significant multiplier effect.”
With international platforms co-developed by Tanzania partners such as EU Tanzania Business Forum and Tanzania Energy Congress, the nation is slated for big achievements in the future.