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Why Invest in Tanzania

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 With 43 million people, Tanzania is not a small market by African standards. Although purchasing power is limited, the economy has been growing steadily at around 5–6% for a number of years. However, the more important market for investors is that offered by the East African Community (EAC), which includes Kenya and Uganda, as well as Tanzania, and has 93 million consumers. The EAC customs union that came into effect earlier this year gives Tanzanian exports to its two partners duty-free access. Beyond the EAC, there are at least three other markets to which investors in Tanzania have access. One is the Southern African Development Community (SADC) with its 215 million consumers; another is the European Union, to which Tanzanian exports have access under the EU’s Everything But Arms (EBA) initiative; and the third is the United States, to which Tanzania has access under the provisions of the African Growth and Opportunity Act (AGOA).
STABLE INVESTMENT POLICY ''One Stop Facilitative Centre''-Tanzania Investment Centre
The pro investment attitude by Government is clearly demonstrated by the innovative investment legislation, the increasing number of foreign direct investments in the country and economic and structural reforms that have led to substantial progress in establishing a functioning market economy. Institutional support for priority investment projects is readily available from the Tanzania Investment Centre (TIC) and other Government institutions.
TIC is the focal point for investors. It is a first point of call for potential investors. It is an efficient and effective investment promotion agency, a “one stop facilitative centre for all investors”, engaging in the business of marketing Tanzania as an investment destination. In order to strengthen and expedite facilitation services, 9 senior officers from Government or its executive agencies have been permanently stationed at TIC to serve investors under the general direction of the TIC Executive Director. Presently these officers include those from:
Lands Department
Tanzania Revenue Authority (TRA)
Immigration Department
Labour Division
Directorate of Trade
Business Registration & Licensing Agency (BRELA)
In response to Scholars and consultants recommendation, TIC is currently undertake targeted promotion of investments internally and abroad based on thorough research. Market research-driven investment promotion tends to be more efficient in cutting costs of promotion and achieving more desirable investment outcomes.
All three EAC countries are blessed with excellent natural assets for tourism but none as extravagantly as Tanzania. Twenty-five per cent of the country’s enormous land mass of a little under a million sq. km has been set aside for national parks and wildlife reserves. These protected areas include the Serengeti plains, the Ngorongoro crater with its remarkable concentration of large mammals in an area of just over 8,000 sq. km and the beaches of Zanzibar – to mention only three of East African tourism’s major attractions.Another set of resources is offered by Tanzania’s mineral potential. The country is Africa’s third largest producer of gold and also has diamonds, gemstones and industrial minerals. Barrick Gold and Anglogold are among the large investors already in place. Yet other opportunities may be found in agriculture, for which soil and climate are most favourable in many parts of the country.
Tanzania has enjoyed political stability for the nearly 45 years since independence. The country has been free of the coups, civil wars and violence that have featured in the post-independence history of so many African countries. Ethnic tensions have been nearly unknown despite the country’s ethnic diversity. The rule of law is well established and the level of security relatively high. The people are welcoming and friendly. One might note too that Tanzania is strategically located, being bordered by eight African countries, and has a coastline of more than 1,400 km. The port of Dar es Salaam is one of East Africa’s two key ports (along with Mombasa) and, with rehabilitation and the privatization of container services, has substantially improved its efficiency.
During the past decade Tanzania has distinguished itself as one of the few African countries that have radically transformed their economies. Successes of these reforms are reflected in the country’s strong macroeconomic fundamentals with consistently increasing growth rates, consistent falling inflation and increasing inflow of FDI. One of the factors that contributed to this success is the country’s unwavering commitment to build a strong private sector.
This achievement is a result of a number of measures to reform the business environment by improving transparency of the investment process and encouraging stakeholder participation. A number of institutions and forums have been put in place to ensure a broader participation of different stakeholders including representatives of the private sector, trade unions, professional associations, media, and Government departments and other representatives of civil society. Existing institutions with stakeholder participation in the investment process include: Tanzania National Business Council; Investor’s Roundtables; Special Reform Task Forces; Investment Seminars; Board membership in TIC and other Government Agencies.
The Tanzania National Business Council 50% government and 50% Private Sector is the lead dialogue institution where government interact with diverse stakeholder representatives from the private sector for dialogue on strategic issues related to the investment process and business environment in Tanzania. The Council is chaired by the President of Tanzania. The President’s commitment to transparency manifests itself in the workings of the roundtables such as the local Investor’s Round Table (LIRT), International Investor’s Roundtable (IIRT) and the Chief Executive Officers (CEO) Roundtable where the President meets private sector representatives on a regular basis to discuss specific issues aimed at improving Tanzania’s business competitiveness.
Infrastructure is one of the key investment drivers of which Tanzania is struggling to improve. There is a sustained programme for building good quality roads. Two railway networks connect 14 out of 21 cities and the neighbouring country of Zambia. There are also international and domestic airports linking Tanzania to the world. The three major ports of Dar es Salaam, Tanga and Mtwara function as hubs for traffic emanating from, and destined to land locked neighbouring countries of Uganda, Burundi, Rwanda, Zambia, Malawi, and Democratic Republic of Congo.
Tanzania is free of ideological confrontations, ethnic problems and labour disputes. It is a centre of economic and political stability in Sub Saharan Africa. Multi party democracy adopted in 1992 has not disturbed the peaceful political climate of the country. The political scene is characterised by parliamentary democracy and public consensus on key social and economic priorities.
Access to skilled labour is a key priority for companies competing in African economies. The Government has made a long-term commitment to develop a pool of well-trained and educated specialists. The Government has increased its education budget significantly compared to the previous budget. Thus Tanzania has to further improve human capabilities and encourage technology transfer as a precondition for enhancing productivity of investment and attaining the desired level of competitiveness.