Tanzania - Foreign investment



From independence in 1961, Tanzania followed state-centered socialist policies. With the initiation of economic reforms in 1986, investment interest in Tanzania has grown considerably in all sectors. Under the Tanzania Investment Promotion Policy of 1990 the Investment Promotion Center was established and by 1997, it had approved about 1,025 projects worth $3.1 billion. The operations of foreign banks were authorized in 1991, and the banking industry was substantially reformed to make it more competitive. In 1992, the Zanzibar Investment Promotion Agency (ZIPA) Act established the Tanzania Investment Center (TIC) as a one-stop shop for facilitating and coordinating private-sector investment, and for issuing certificates of incentives to qualifying investors. The incentive package includes 100% capital allowances in computing gains and profits of an enterprise; 0% import duty on capital equipment in "lead" sectors (mining, oil and gas, tourism, and infrastructure development), and 5% import duty on equipment for projects in "priority" sectors (agriculture, aviation, commercial buildings, development banks, export processing, special regions, human resources development, manufacturing, natural resources, radio and TV broadcasting, and tourism); and an automatic permit to employ up to five foreign nationals. The Tanzania Investment Act of 1997 was strengthened by the Land Act of 1999 and the Village Land Act of 1999, which provide the right to acquire land in urban and rural areas, respectively. As a further impetus for reform, the Tanzanian government has taken steps to qualify under the US Africa Growth and Opportunity Act (AGOA), effective 2001, that mandates tariff-free and quota-free access to the US market for countries making market-based reforms.

From 1997 to 2001, annual foreign direct investment (FDI) inflows increased steadily from $157.8 million to an estimated $202.7 million in 2001, averaging $182 million a year, according to the Bank of Tanzania data.

The 10 leading countries that have invested in Tanzania are the United Kingdom ($401,549), the United States ($242,489), Kenya ($135,789), Canada ($108,154), South Africa ($176,928), China ($112,131), Germany ($58,744), Italy ($47,743), the Netherlands ($53,564), and India ($39,658). Foreign investment has mainly gone into mining, manufactures, agriculture, and tourism.

User Contributions:

mina
Report this comment as inappropriate
Nov 22, 2007 @ 5:05 am
how is the security of employment in tanzania in textile industries, how do these foreign investors assure tanzanians the security of their employment?

i will be grateful fo you answers
Report this comment as inappropriate
Feb 23, 2010 @ 7:07 am
I think before answering this question, a more important question needs to be asked. How secure do the investors feel about their investment?. Only if they feel secure can they extend security to their employees. The Local media has continuosly blamed investors for the drop in foreign direct capital (citing the article on 30 Dec 2009 in the Guardian).

To begin with investing in the country is made difficult due to the laws governing foreign investment. It is extremely discouraging to note that after investing all the capital in a viable enterprise one has to establish a holding company where the majority shares are owned by a mandatory Tanzanian partner.

It is of great concern that the newspaper article states that some foreign investors make huge profits and that they do little to uplift the standard of living of the people in the surrounding areas. Logically the investors are there to make huge profit, why else would they be there, and why would the foreigners be handed over the burden of uplifting the standard of living of the people. That responsibility should lie with the government, which surely cares about its people. The investors are looking to maximize their investment; consequently it is out of context to expect them to mimic the mandate of the Red Cross.

The article also mentions claims of wrong doing, surely before printing the article, the cases should have been investigated for merit.

The two pronged approach suggested in the article can work but how does the investor ensure that the investment reaches the local people, is it their responsibility to ensure this, doesn’t the government have a big part to play in this. Is it not an advantage that when a concern is established that tens or hundreds of otherwise unemployed persons gain employment.

On a final note if the investors are to ensure that the local community benefits from their enterprise the whole idea of the investment which is to maximize profit will be defeated forcing the investors to take their business elsewhere. It is very easy to point a finger at the investors, blaming them, but the local community should also take part of this blame because their expectations from the foreigners far outweigh the reasons for which the investors are there.
Report this comment as inappropriate
Jun 30, 2010 @ 9:09 am
I totally disagree with the above answer for one important reason. Yes, investors expect to profit from any investment made, but this profit should also go in parallel with the Corporate Social Responsibility to make both of the parties benefit. How it feels to go and use someones resources with the name of investment-you profit and leave him/her empty handed. This is not the way the contemporary approach to globalized political economy should operate. Why investors focusing on super profit unnecessarily without making the other side improve their lives. It's better such investor go with his/her capital forever.

For example, I have land and natural resources (minerals-diamond, gold and gemstones) how come you invest dig my land, use my people and enjoy the super profit without having such concern of the society you operate in? This will be exploitative kind of investing so far if not imperialism.

Such investment you are referring on your answer if of the time before decolonization and not the contemporary liberal and competitive international economy. Off you go if you feel unfairly treated by not caring about corporate social responsibility.
Report this comment as inappropriate
Feb 18, 2011 @ 5:17 pm
well for me i think the Government should try to revise its policies on investment in tanzania. i believe just as much as the investors come to make huge profits, their concern for the welfare of the tenzanian people is very minimal..in that case its the duty of the government to stand forward and make sure that just as the investors profit, they dont just leave the tanzanian people empty..the government should devise mechanisms that will propell the development of the tanzanian people...because how else are we ever going to improve the welfare of the people?
the investment policies shuold not just satisfy the necesities of the investors...its shuold by all means quench the thirst of development that all the tanzanians are seeking for...and the government should take the lead and face up to all these investors and make Tanzania a better country.
Report this comment as inappropriate
Jun 1, 2011 @ 3:03 am
Brief history of the Tanzanian Direct foreign investment for previous ten year. Which conrties deals with Tanzania in foreigh investment in that period? The impacts, problems and how the Tanzanian government handling these problems? How the foreign direct investment effect the employment in the country?
jesse
Report this comment as inappropriate
May 16, 2012 @ 11:11 am
i have a very vast land and am looking for investors to invest into it in any category of theis choice to avoid the land going waste it can be used for the building of factories for production and the production of agriculture goods for export.

Comment about this article, ask questions, or add new information about this topic:

CAPTCHA


Tanzania forum