AS President Samia Suluhu Hassan marks two years in office, Tanzania is becoming a more attractive global investment destination and investors are noticing.
A raft of policy changes to improve business regulatory framework, sound macroeconomic fundamentals, a vibrant financial market and investment promotion drive she leads are pulling in foreign and foreign investments to the East Africa’s second largest economy like never before.
These efforts and government’s business-friendly approach are sending positive signals to investors, who are increasingly choosing Tanzania as their preferred investment destination.
Tanzania Investment Centre (TIC) says in its February monthly investment bulletin that a total of 41 projects were registered across the country representing a 128 per cent increase compared to 18 projects that were registered in February 2022.
Projects registered in February 2023 had a total value of 339.2 million US dollars (about 793bn/-) and were expected to create 7,370 jobs. This reflects a 347 per cent growth over the 75.9 million US dollars in capital estimated to be pumped into the economy in February 2022.
Likewise, the 7,370 jobs expected from the new projects portray a 493 per cent increase over those created by projects registered in February 2022.
According to the bulletin, the 41 projects registered in February 2023 is an increase 86 percent compared to 18 projects registered in January 2023 while the value of capital expected to be invested increase by 413 per cent from 66 million US dollars for projects registered in January 2023 to 339 million US dollars for projects registered in February 2023.
Transportation continued to be the leading sector in terms of capital followed by agriculture, manufacturing, tourism and commercial building.
Transportation attracted investment worth 156.17 million US dollars equivalent to 46 per cent, while agriculture attracted 90.20 million US dollars accounting to 27 per cent, manufacturing 53.68 million US dollars, tourism 29.02 million US dollars or nine per cent of all projects and commercial building 10.15 million US dollars or three per cent.
On the other hand, while manufacturing, tourism and agriculture were the top three leading sectors in attracting foreign direct investments, transportation, agriculture and manufacturing sectors were the top three leading sectors in attracting domestic direct investments.
Likewise, the majority of the jobs are expected to be created in agriculture, transportation and manufacturing.
Moreover, the five countries major sources of FDIs in February 2023 are China, DR Congo, United Kingdom, Malawi and Kenya.
Out of 41 projects registered in February 2023, 34 per cent are fully owned by Tanzanians while 42 per cent are fully owned by foreigners and 24 per cent are on joint venture ownership.
A number of factors have contributed to drive foreign and domestic investments. TIC Executive Director, Gilead Teri said apart from devoting considerable attention to supporting investors, the government has streamlined licenses and permits procedures through implementing the Blueprint for Regulatory Reforms.
The government has also increased the use of automation in compliance processes, rationalization of institutions reducing overlaps, simplifying investment land acquisition processes, undertaking real-time dialogue to addressing arising issues, and enacted a New Investment Act. in 2022 to replace a longstanding one from 1997.
“H.E. Dr. Samia Suluhu Hassan continued to show great commitment to transforming Tanzania’s investment landscape by elevating the investment mandate to the President’s Office,” he said.
The East Africa’s second largest economy is pushing ahead with major regulatory reforms to improve the investment climate so as to boost domestic and foreign investments and take advantage of its strategic location as the most effective entry point and a gateway for trade into Eastern, Southern and Central Africa.
Investors are increasingly becoming more optimistic about investment prospects in Tanzania.
“Great job to Tanzania’s President, H.E. Samia Suluhu Hassan, for her proactive approach to opening Tanzania to FDI,” said Mohamed Dewji, Owner & President of MeTL Group when he spoke to CNBC Africa on doing business in Tanzania under the leadership of President Samia Suluhu Hassan.
Speaking on what makes Tanzania attractive to investors he said: “The 6th phase government under President Samia Suluhu Hassan has made fantastic changes FDIs flowing in like never seen before we looking at almost close to 3.5 billion US dollar of investments coming in on yearly basis.”
He said President Samia Suluhu Hassan was becoming “very friendly and very open for business” and had made the environment great for people to come and invest, cutting down on bureaucracy.
Speaking during East African Venture Capital Association (EAVCA)’s 3rd Private Capital in Tanzania conference in November last year, Amne Suedi, Principal of Shikana Law Group said; “up until earlier 2022, we weren’t seeing that many changes. We were seeing that the government was definitely becoming more open and friendly. But in terms of regulatory and legal frameworks, we weren’t really seeing much change.”
“However, this year we’ve been invited to engage with the government on several changes. There’s a new Tanzanian Investment Act that is coming into play where we see that a lot of the incentives that were eroded in the last few years are coming back.
Heri Bomani, MD of Pangani Group said at the same conference; “the change is the mood in the country is clear. If you go back over the last few years, people were downcast, pessimistic, unsure, and uncertain about the way forward in Tanzania. And over the last 18 months, the mood has changed. People are a lot more optimistic and want to do deals.
According to Uday Bhasin, Senior Partner of Tradeways Capital, “the key change that has happened in the last couple of years is that there has been an increasing willingness from policymakers and regulators to engage in dialogue with the private sector.
And Jayesh Shah, the Managing Director of Sumaria Group hailed Tanzania Revenue Authority (TRA) for becoming friendly to businesses and improving their capacity to collect tax revenue by pursuing reform strategies which are pro-business.
“TRA has improved in collecting with a smile. Under the previous regime, they were overzealous in terms of how they were collecting it. Now you can engage with TRA. VAT refunds were also an issue because they took too long. Now there is a budget provided, so we have actually seen them happening,” he said.
