Dar es Salaam. The government yesterday met representatives of the private sector to collect their views for the ongoing review of the country’s investment policy and legislation.
Tanzania’s investment activities are guided by the country’s Investment Act of 1997, the National Investment Promotion Policy of 1996 and the Long-term Perspective Plan 2011/12–2025/26.
Introduction of the legislative pieces resulted in the creation of the Tanzania Investment Centre (TIC) under which the country has witnessed a massive increase in both domestic direct investments (DDIs) and foreign direct investments (FDIs). Data shows that TIC registered FDIs totalling $21.2 billion in 2017: a massive leap from $3.3 billion in 1999.
Also, Tanzania increased its Fixed Capital Formation to Gross Domestic Product ratio from 14.7 percent in 1997 to 44 percent in 2018.
Furthermore, commodity price fluctuation went down from 16.1 percent in 1997 to 3.2 percent by the end of April this year (2020).
But, with the ongoing regional integration and the African Continental Free Trade Area (AfCFTA) negotiations, the government believes it needs a new a comprehensive approach in attracting investments.
“As a country, we need to have a comprehensive investment policy to attract investments - especially as we approach joining AfCFTA,” the director of Planning and Budgeting at the Prime Minister’s Office (Investment), Mr Packshard Mkongwa, told the joint meeting in Dar yesterday.
However, despite the registered achievements, the sector still faces challenges in seven thematic areas, including investment coordination; investment promotion; investment facilitation; regional and international integration; land for investment; investment financing and incentives, and technology development.
“The identified challenges are categorized into three issues; legal, policy and administrative,” said Dr Jumanne Gomera, Investment Coordinator in Prime Minister’s Office when he presented the overview report of the Investment Policy-1996 implementation.
Other challenges, Dr Gomera said, are limited financial and technical capacity of LGAs and agencies to secure conflict-free and serviced land for investment, and inadequate comprehensive land survey.
Tanzania is also experienceing inadequate specialized incentives for targeted investments, and limited incentives for re-investments and business expansions.
“A majority of Tanzanian business people have low level of awareness on investment information and opportunities,” said Dr Gomera.
The country also experienced inadequate availability of physical infrastructure to facilitate investments (power, water, telecommunication, transport), and high compliance costs (multiple regulatory bodies, levies and charges).
To address the challenges and improve the investment climate in the country, Dr Gomera reiterated the government’s commitment to work on the challenges in close collaboration with the private sector and other development partners.
For his part, the acting executive director of Tanzania Private Sector Foundation (TPSF), Zachy Mbenna, said “It is our desire to have an improved investment Policy which focuses on identifying and maximizing opportunities for the country’s socioeconomic development.”
Yesterday’s meeting brought together members of private sector institutions, including TPSF, the Tanzania Chamber of Commerce, Industry and Agriculture (TCCIA) and the Confederation of Tanzania Industries (CTI).
The Prime Minister’s Office met members of the public sector in a joint meeting held in Dodoma on September 11 this year, to discuss the same investment issues and collecting views from the members in order to reform the country’s investment Act and Policy upon the successful validation of the raised and collected opinions raised by the public and private players.