Why invest in Tanzania
PRESIDENT Samia Suluhu Hassan has invited South African investors to tap potentials in various sectors such as power generation, Information and Communications Technology (ICT) development, given the good environment for business and investment in the country.
She said Tanzania continues to improve business and investment climate for the sake of attracting more investors as well as increasing interaction among Tanzanians and those from other nationalities.
According to her, the government is also working to improve power generation for it to contribute significantly to the Southern Africa power pool as well as matching with the global advancement of ICT for development.
She extended the invitation on Thursday in Pretoria South Africa when she attended a business forum between South Africa and Tanzania.
Dr Samia, who was on a State Visit to South Africa in response to an invitation of her host President Cyril Ramaphosa, said investors coming to Tanzania have an advantage of securing markets from all regional blocs in Africa.
The Head of State told the forum that Tanzania is well connected to member counties of the Southern African Development Community (SADC), East African Community (EAC), African Union (AU), Commonwealth, among others.
She also assured foreign investors of Tanzania’s determination to consolidating policies and making institutional regulatory reforms.
“The government of Tanzania is determined and dedicated to consolidating policies and making institutional regulatory reforms to improve the business environment,” she said.
According to her, some of the reforms undertaken have improved consistency in predictability of policies, laws and regulations.
The reforms are also intended to enhance transparency and address unnecessary red tape and other bottlenecks.
“We also have taken strong measures to improve efficiency in revenue collection and tax administration by enhancing fairness in tax assessment, ensuring timely VAT returns and digitalisation of tax system,” she noted.
The Head of State added further that Tanzania has also amended the Tax Revenue Act to accommodate alternative disputes resolution mechanisms and hence reducing bureaucracy in addressing tax appeals.
She told investors that Tanzania has also taken measures to strengthen Tanzania Investment Centre (TIC) and Zanzibar Investment and Promotion Authority (ZIPA) to effectively and efficiently operate as one stop centre for investment, promotion and facilitation.
Another groundbreaking reform the government has made was to enact the new Tanzania Investment Act of 2022 to replace that of 1997.
The new act has introduced a level playing field, shortened time for obtaining licences from 14 to seven working days.
In regard to rebuilding of the economy, Tanzania continues with the construction of infrastructural and energy flagship projects including the Standard Gauge Railway (SGR) of close to 2000 kilometres from Dar es Salaam to Kigoma region.
“We expect it to cross over to Burundi, Rwanda, Democratic Republic of Congo (DRC) and link up Tanzania with Uganda through Lake Victoria,” she said.
Adding; “Tanzania has good road networks with excellent conditions linking neighbouring countries within South African Development Corporation (SADC) and the East African Community (EAC).
On ports, Tanzania has worked to improve cargo handling capacity for the ports of Dar es Salaam, Tanga, Mtwara, Zanzibar and those in Lake Victoria and Tanganyika.
Giving statistics, Dr Samia said by 2022, Tanzania’s value of registered Foreign Direct Investments (FDIs) stood at 4.5 billion US dollars, up from 1.4bn US dollars that were recorded in 2021.
She added that by December 2022, credit growth of the private sector was recorded at 22.5 per cent compared to 10 per cent of the corresponding period in 2021.
This, according to her, is equivalent to an average of 9 per cent growth between 2015 and 2022.
“The real GDP is back on recovery to a rate of 4.8 per cent in 2021 and 5.2 per cent in 2022. The World Bank has projected that the country will have a growth of 6.2 per cent in the next few years,” she said.
Moreover, inflation has remained moderate as records show that in 2022 the inflation was at 4.3 per cent while in 2021 the figures were recorded at 3.9 per cent.
For his part, President Ramaphosa said the forum is a continuation of the existence of mutual understandings and trough this, “we are going to bring new more deals.”
“Outcomes of this forum will usher in new momentum in trade and investment cooperation between our two countries,” he said.
Adding; “We found a common ground on practical measures and we need to forge a new partnership aimed at enhancing and increasing our bilateral trade and investment relations”.
According to him, since the two countries established diplomatic relations in 1994 they established the Bi-National Commission in 2011, adding that bilateral trade and investment between the two countries has continued to grow.
“If one excludes gold, exports from South Africa to Tanzania increased from 177 million US dollars in 1995 to 459 million US dollars in 2021,” he said, adding that Tanzania’s exports to South Africa increased from 4.5 million US dollars in 1995 to 30 million US dollars in 2021.
“In 2021 gold trade between the two counties was worth around 880 million US dollars,” he said, noting further that South Africa is a major investor in Tanzania.
Statistics have it that, between 1997 and 2022, South African companies have invested in a total of 250 projects, valued at 1 billion US dollars, which have created more than 18,000 jobs in Tanzania.
The projects cover sectors like agriculture, construction and real estate, telecommunications, financial services, transportation, manufacturing, mining and petroleum, tourism, energy infrastructure, services and broadcasting.
“There is still much scope for South Africa and Tanzania to strengthen cooperation in these sectors and to expand into other sectors, such as minerals, health care, pharmaceuticals, and infrastructure development,” he said.