Investment looking up after years of ups and downs

Dar es Salaam. Investment in Tanzania is showing promising prospects after ups and downs that came with political leadership changes in the last three decades.

Government statistics indicate that the number of projects and jobs created and size of injected capital increased from 1996 when the Tanzania Investment Centre (TIC) started keeping records until 2016 when numbers dropped significantly.

However, there are notable rebounds in all the three aspects used to measure investment performance.

The Minister of State in the President’s Office (Planning and Investment), Prof Kitila Mkumbo, said when presenting his docket’s 2024/25 budget proposals in Dodoma on Monday that investment has increased steadily since President Samia Suluhu Hassan came into office three years ago after the government accelerated reforms to improve the business environment.

“Based on its philosophy of opening up the country to improve the investment and business environments in Tanzania, the government has continued to attract new investments from both local and foreign investors. The aim is to widen the scope of economic activities by adding new investments and protecting existing ones,” he said.

Tanzania registered 12,381 projects worth $117.821 billion from 1996 to 2023, creating 1.77 million jobs in the process, Prof Mkumbo added.

Under President Benjamin Mkapa – who oversaw the creation of TIC as a government agency charged with coordinating, encouraging, promoting and facilitating investments in Tanzania – the average number of projects registered annually was 281 before increasing to a high of 708 during President Jakaya Kikwete’s tenure.

The number dropped to 282 under President John Magufuli, but has rebounded to an average of 358 since President Hassan came into office.

Likewise, the capital injected to the projects increased from the average of $1.05 billion per year during the third phase government to $7.85 billion during the fourth phase before dropping to about $3 billion during the fifth government.

However, the tide is currently changing direction as the registered investment value is now averaging $4.67 per year under the sixth government.

The projects were also expected to employ 49,542 people, 85,954, 37,344 and 76,975 respectively, according to the minister’s budget speech.

“The number of investment projects, employment opportunities and the value of capital has been increasing after every year recently,” said Prof Mkumbo, adding that the number of projects increased from 207 in 2020 to 526 in 2023.

He said the value of capital has increased from $1.09 billion in 2020 to $5.72 billion in 2023 while the job opportunities increased from 17,385 to 137,010 during the same period.

Improving the investment climate

Tanzania is implementing blueprint for regulatory reforms to improve the business environment in attempt to remove all business barriers.

According to Prof Mkumbo, the initiative has brought achievements including the reforms in 80 legal areas between 2018 and 2022.

He also said that 55 laws and regulations governing investment, industry, trade, agriculture, livestock, health, natural resources and tourism had been amended while 374 charges, fees and fines to stimulate business and investment.

He also said merging of some regulatory institutions and establishment of some 42 electronic systems were part of the outcomes of the reforms to improve the investment climate in the country.

Parliament’s Governance, Constitution and Legal Affairs Committee congratulated the government for opening doors for both local and international investors.

“The government through the Treasury Registrar should now increase its investment in stock markets and private companies which have impact to the public,” said committee chairperson Joseph Mhagama.

“The government should also continue improving the investment and business environment in the country by providing important services in investment zones in every region,” he said, adding that the government should also allocate land for specific investments.