How Tanzania can create more billionaires

Prominent businessman and investor Rostam Aziz called for greater support and empowerment of local investors, saying they are crucial in driving economic growth and development.

The discussion, titled “Local Investors Empowerment”, also featured Tanzania Sugar Producers Association (TSPA) chairman Ami Mpungwe and Tanzania Private Sector Foundation (TPSF) chief executive Raphael Maganga.

Mr Aziz said Tanzania’s local construction industry has matured, with local firms now capable of handling large-scale projects.

He added that major national projects, such as the building of railways, roads and other infrastructure, should be awarded to local companies to keep money circulating within the country, saying this will boost businesses and benefit many Tanzanians.

“The investors we brought in 35 years ago were experienced, well-capitalised and necessary at that time, but today the calibre of investors we attract is significantly lower than those of past decades. We need to ask ourselves – do we really need these current investors, or should we empower our own people to take on these roles?” he asked.

“A foreign investor focuses on quick business gains and then looks for opportunities in other countries,” Mr Aziz said, adding that foreign investors often come with their own teams and invest profits outside the host country.

He urged the government to prioritise local investors so that public project funds have a significant impact within the country, noting that taxes will be paid, businesses will thrive and the economy will grow.

“No country in the world has achieved economic progress solely by relying on foreign investors.”

Mr Mpungwe voiced similar sentiments, emphasising the importance of balancing local participation with foreign expertise in Tanzania’s economic development.

Drawing on his extensive diplomatic experience, he said sustainable development requires inclusivity.

“Sustainable development must include everyone. While we can’t entirely exclude foreign investors, especially those with critical expertise, the priority should be on enabling Tanzanians to take ownership of their economy,” Mr Mpungwe said.

He recalled the privatisation years in Tanzania during which the government deliberately retained minority stakes in key enterprises to maintain balance while promoting private sector growth.

For his part, Mr Maganga underscored the need for robust policies that uplift local businesses.

“TPSF fully supports the National Local Content Policy, which is based on three pillars – building Tanzanians’ capacity to employ more locals, enabling knowledge transfer from foreign companies and ensuring Tanzanian businesses remain competitive,” he said.

Mr Maganga also noted an increase in investments registered by the Tanzania Investment Centre (TIC), saying it reflect private sector growth.

TIC data shows that the agency has surpassed its 2023/24 goals by drawing $3.5 billion in foreign direct investment and $3.1 billion in domestic direct investment against its original targets of $1 billion and $0.7 billion, respectively.

Weaknesses

A serious plan to empower local entrepreneurs and raise the number of home-grown billionaires in Tanzania requires mindset changes within both the public and private sector, according to analysts.

For instance, while tipper and machinery owners last month voiced their frustration at being excluded from multi-billion-dollar projects awarded to foreign contractors, the government is of the view that some of the work done by locals leaves a lot to be desired.

During their annual meeting under the Tanzania Tipper and Machine Owners Association (TTMOA) last month, business owners accused some contractors of using only their own resources and sidelining local operators.

The perspectives shared by Mr Aziz, Mr Mpungwe and Mr Maganga all converge on the crucial need to empower local investors for sustainable economic growth in Tanzania.

However, despite government efforts to promote local contractors and empower them with major development projects, dishonesty and inefficiency threaten to derail these initiatives.

Read: Local contractors at risk of missing out on Sh840 billion projects

For example, with Sh840 billion earmarked for repairing roads damaged by the recent El Niño rains, many local contractors could find themselves sidelined due to their inability to meet the standards set out in their contracts.

Works minister Innocent Bashungwa said recently that some local contractors fail to live up to expectations.

“There are some local contractors who, after being awarded tenders, fail to adhere to professionalism,” he said.