NATIONAL Economic Empowerment Council (NEEC), is looking for financial mechanisms that will facilitate local investors’ participation in construction of mega projects by foreign investors.
The Petroleum (Local Content), Regulations, 2017 requires non-local businesses to incorporate and prioritise Tanzanians’ participation through employment, joint ventures of at least 15 up to 100 per cent for works and goods supply and also the exclusive use of local services, such as banking, insurance and legal.
NEEC’s Executive Secretary, Beng’i Issa said in Dar es Salaam recently that capital inadequacy is a major hindrance for local investors entering into joint ventures with foreign investors in executing huge projects.
“To address the problem, the establishment of financial mechanism with sufficient funds is important to support local investors capitalise in the implementation of huge projects through joint venture with foreign investors,” she said in an interview with the local radio.
For example investment and participation in oil and gas exploration need massive funding for which most of the local investors cannot afford.
She said most local investors have failed to meet 25 per cent capital stated by the law in order enter into joint venture with foreign investors in pursuing mega projects in areas like oil and gas.
Ms Issa said the government credit guarantee scheme lack sufficient funds to facilitate local investors with sufficient capital in order to pursue huge projects with foreign investors.
“It is from this backdrop that to-date we still have very few local investors executing mega projects individually or in joint venture with their foreign counterparts.”
With a Local Content Act in place, she said jobs would be created, a transfer of technology and expertise, engineering and fabrication technology development, engagement of indigenous owned vessels and equipment, local capacity building and improved income per capita.
Investments for which local investors can take part in include exploration, exploitation and drilling activities.
Other investments include provision of mobile drilling rigs, production platforms, and facilities supply vessels, and various barges for pipe laying, launching structures and other works.