DAR ES SALAAM: TANZANIA marks 63 years of independence today. As the nation celebrate its birthday, it is essential to reflect on the progress of the country’s investment landscape.
The investment sector is a cornerstone of any nation’s development, driving job creation, revenue generation, technology transfer and improving the standard of living for citizens.
The sector plays a pivotal role in fostering broader economic growth and stability. Revisiting the evolution of this sector allows us to appreciate its contributions and identify opportunities for continued advancement in the years ahead.
In any independent country, the investment sector plays a crucial role in creating jobs, revenue generation, transfer of technology, improvement of citizens’ living standards and economic growth at large.
From its early postindependence days of a state-controlled economy to its current market-driven approach, the country has undergone notable transformation into a promising investment destination in East Africa while maintaining its overarching goal of strengthening socio-economic and political independence.
This milestones echo Tanzania relentless efforts of improving business atmosphere which have been translated in all government phases, from the Father of the Nation, Mwalimu Julius Nyerere to the incumbent head of state, Dr Samia Suluhu Hassan.
Commenting on the transformation of the investment sector, Economic Diplomacy Expert, Professor Kitojo Wetengere based at the University of Arusha (UoA) said the improvement in business environment in all government phases reflected the need for all investors to contribute to wellbeing of all citizens and the country’s economy development.
Prof Wetengere narrated that the country’s founding father Mwalimu Nyerere after independence in early 1960’s and his entire term in office ensured all colonial inherited investments are nationalised and natural resources including land and minerals are protected and utilised for citizens’ development.
Featured by the Arusha Declaration of 1967, the first phase government was committed to development of the African socialism (Ujamaa) with central planned economy where a number of industries and public services including schools were nationalised and wealth was evenly distributed to all people.
The state controlled major industries, with a focus on attaining self-reliance and equality. Prof Wetengere said the move amplified Mwalimu Nyerere’s lifelong vision of ending colonial economy and paving the way for Tanzanians to control their economy.
Tanganyika (now Tanzania Mainland) was colonised first by Germans from 1880s to 1919 and then by British from 1919 to 1961. Nyerere turned the tides.
He said under the first phase government Foreign Direct Investment (FDI) remained few and in most cases was selective to specific countries with socialism roots like China and Russia in sector such as infrastructure in line with Tanzania interest of creating the people-centred economy.
He noted that despite stagnation in FDIs development during the first phase but the situation it was at good intent of Mwalimu Nyerere of preserving natural resources like minerals for future generations which he believed one day would possess required technologies and enough for undertaking sustainable investments which can upgrade citizens’ livelihoods and the country’s economy as whole.
“Unlike to colonial investors who were driven by their home countries demand of raw materials and cheap labourers, Mwalimu Nyerere wanted to ensure all investments benefit the Tanzania’s local community first and lead to value addition rather than exporting raw agricultural and mineral products,” Prof Wetengere said.
Came the second phase, the government under President Ali Hassan Mwinyi apart from continuing to uphold the country’s independence adopted the open economic policy to fit with new global dawn embedded with trade liberalisation and privatisation.
Prof Wetengere noted that under Mwinyi’s presidency, the government began the process of privatising inefficient state-owned enterprises and introduced policies to attract international investors, the transformative trajectory that was followed by his successors which are Mr Benjamin Mkapa, Dr Jakaya Kiwete, Dr John Pombe Magufuli and Dr Samia Suluhu Hassan.
“After President Mwinyi, our country continued to register significant improvement in business climate year after year, administration after administration,” Prof Wetengere told the “Daily News” in an interview over the weekend. In 1997, the government led by President Mkapa established the Tanzania Investment Centre (TIC), the main agency for promoting and facilitating investments till to date.
Also, he lauded Tanzania’s good diplomatic relation with the fellow member states in the EAC and SADC by collaborating in trade and establishing joint economic infrastructures such as railways. As the result, Prof Wetengere said investors see Tanzania as gateway to the EAC and SADC markets.
He called upon the government to continue ensuring Tanzania is interconnected with other EAC and SADC’s countries through transport infrastructure including railways, roads and airports which are vital in accelerating regional trade and investments.
Prof Wetengere said presence of abundant natural resources including gas, minerals, water bodies; vast fertile land and wild animals in the country also attract investors.
In the just ended first quarter (Q1) covering July to September of the 2024/2025 Financial Year (FY) the country witnessed registration of 256 new projects in comparison to only 137 projects recorded in the corresponding period last FY.
Briefing journalists in Dar es Salaam recently, the Tanzania Investment Centre’s (TIC) Executive Director, Mr Gilead Teri said that the value of investments in the Q1 of the ongoing FY reached 3.9 billion US dollar (about 11tri/-) compared to 2.1 billion US dollar ( about 5.7tri/-) in the corresponding period of the 2023/2024 FY.
He said such an upward trend in attracting capital inflows signifies unwavering commitment of the government under President Samia welcoming domestic and foreign investors in the country featured by the economic diplomacy.
More significantly, Mr Teri said the government has adopted the new Investment Act of 2022 which offers incentives to all investors in ensuring that they get sound returns from their investments.
The new Investment Act of 2022 gives fiscal incentives to the expansion and rehabilitation projects from which investors can enjoy import duty-free for capital goods such as machines and plants, while the deemed capital good can access the import duty relief by 75 per cent while enjoying nonfiscal incentives including protection of their capitals under the TIC.
The new Act also reduced capital threshold for domestic investors to 50,000 US dollar (133m/- ) from 100,000 US dollar (267m/-).
Furthermore, he said the increase new investments is also due to the collaborative efforts involving Tanzania’s embassies across the world , TIC and other public entities which together have been creating promoting the country’s economic opportunities and their tailored incentives for investors.
In another development, Mr Teri noted a substantial increase of investment in Q4 (covering April to June) of the last FY (2023/2024) whereby the centre registered 198 projects worth 1.6 billion US dollar (about 4.3tri/-) which are expected to generate over 96,000 new jobs.
He said in Q4 of the last FY, the number of new projects registered was up by 53 per compared to the same period in 2023, when only 129 projects valued at 1 billion US dollar (about 2.7tri/-) were registered which created 14,631 jobs. In the Q4, the capital of projects registered saw a growth of over 60 per cent.
In the Q4, Foreign Direct Investments (FDIs) constituted a notable share of the overall approved investments valued at 938 million US dollar (about 2.6tri/-), read the recent TIC’s Quarterly Bulletin. Conversely, the Domestic Investments (DIs) made up about 12 per cent of the total approved investments, amounting to 681 million US dollar (about 1.9tri/).
Mr Teri said the country’s consistence upward trends in registering projects, capital inflows and job creation mirror the growing business confidence in Tanzania and TIC’s efforts in facilitating investments. Detailing investment registration by sector in Q4, he said the manufacturing sector surpassed other sectors by attracting an estimated capital of 637 million US dollar (1.7tri/-).
He said the manufacturing sector was followed by other high-performing sectors including commercial building, human resources, transportation and tourism. In an interview with the “Daily News” in response to stunning progress of attracting investments, Mr Teri noted that unlike many other East African country which experience recurring political turbulence, Tanzania on its part has maintained peace and tranquillity an essential factor which also attract investors.
More significantly, he underlined the fact that President Dr Samia Suluhu Hassan through her 4R philosophy which stands for reconciliation, rebuilding, resilience and reforms has made strides toward inclusivity and transparency, aiming to bridge divides which can hinder economic growth.
Commenting on Tanzania’s impressive feat in attracting investments, Economist cum Investment Banker, Dr Hildebrand Shayo said Tanzania is a great destination to launch a business due to its business-forward orientation and lowrisk environment.
“Tanzania presents exceptional economic potential as a result of its beneficial tax system, legal and regulatory framework, legislative autonomy and competitive market fundamentals” Dr Shayo told the “Daily News ”.
Furthermore, Dr Shayo said Tanzania’s pivotal commercial centre in the East African Community’s (EAC) area supported enhanced business environment increasingly makes the country becomes a desirable destination for investors.
In another development, he attributed the achievement in attracting investors to development of economic infrastructure including roads, airports, railways and ports. Business Expert Dr Sylivester Jotta, who doubles as the entrepreneurship lecturer at the St Augustine University of Tanzania (SAUT) attributed the country’s success in keeping attracting investments to presence of predictable business policies and laws which give confidence to investors.
Also, Dr Jotta appreciated President Samia for undertaking ministerial structure reforms by formulating the Ministry of Planning and Investment under the President Office namely President Office (Planning and Investment). He said by placing the ministry under the president’s office, President Samia amplifies the country’s commitment to boosting investments.
The ministry is mandated on among others to formulate and monitor implementation of policies on investment, coordination of promotion and facilitation of Domestic and Foreign Investment as well as monitoring performance of extra ministerial departments including the TIC affairs.
Meanwhile, Director and Founder of Akberalis Hardware and Electric Limited, Mr Akberalis Jozer based in Dar es Salaam said the country under President Dr Samia has continued to exercise good governance and rule of law which significantly mitigating bureaucracy.
He said the Akberalis Hardware and Electric Limited which ventures in manufacturing aluminium ladders and Polypropylene (PP) Ropes has been operating smoothly.
“There is no threat to investors. Government officials have been supporting us to align with investment regulations and rules,” said Mr Jozer said.
In her end-of-the-year speech on December 31, 2023, President Samia announced that the country, through the Tanzania Investment Centre (TIC), registered a total of 504 projects worth 5.6 billion US dollars (about 14 tri/-). The statistics represented a 58 per cent increase from only 292 registered projects in 2022.
55 projects from the total of 504 were expansion projects, signalling investors’ trust in the country’s business climate. TIC targets to register 1,000 projects worth 10 billion US dollar (about 27tri/- ) in 2024.
