Is Tanzania truly investor-friendly?

Mr Salum Awadh. PHOTO | COURTESY

At a recent symposium in Dar es Salaam, Mr Salum Awadh said that “Investment money behaves in two ways: it goes where it is attracted; and it stays where it is treated well.”

Mr Awadh is an angel investor and an award-winning investment banker who, at a relatively young age, founded – among other enterprises – Shrikah Invest, Jabalnur Finance, SSC Academy and the Mbadala Impact Fund.

According to Investopedia, an “angel investor” – also known as a “private investor, seed investor” or “angel funder” – is a high-net-worth individual who provides financial backing for small start-ups or entrepreneurs, usually in exchange for ownership equity in the company.

Mr Awadh authored Dare or die, Smart Up your start Up and Where is the Money-Ask the VC.

Mr Awadh is as Tanzanian as they come, and if we want to vimba (take pride and swell), there we are… Yes, he is one of our own.

But Mr Awadh is also a global citizen who has worked in New York – if I am wrong here, Bwana Salum, correct me! He also operates in Tanzania, Rwanda and Dubai.

However, this piece is not for Mr Awadh’s benefit. Nor is it even about Mr Awadh and his angel investment journey. Hell, NO! This piece should be looked at against the background of the journey of the United Republic of Tanzania to attract foreign direct investments (FDIs) to our shores.

A few days ago, a friend shared a video in which the Dodoma Regional Commissioner, the irrepressible Anthony Mtaka, was speaking to soon-to-retire civil servants. In the event, he said something to the effect that, if one has never done any business, the worst thing one could do is to invest using one’s retirement benefits.

Mr Mtaka said the investment world is like a walking time-bomb that is full of risks and that, a retiree’s pay-off of Sh180m ($80,000) after 40 years of dedicated service can evaporate just like that if the retire does not make smart investment choices.

But, I think people like Mr Salum Awadh are doing very well in business – and are making life-changing decisions using their money – and other peoples’ money as well.

Assume that you have money which you want to invest. More often than not, most of us simply take advice from close friends and family – and proceed to invest it in cashew nuts or pawpaw business, as Mr Mtaka suggested.

The newly-found angel investors are as aggressive, if not more, as are Mr Awadh and his colleagues who are in the investment and advisory space.

Not too long ago, I was shocked by a former administrator who attended an investments-touting event and after listening to the presentations, turned on the investment advisors from UNCDF (UN Capital Development Fund), wondering why they “do not just give us money because we know what we want to do with it. Msitupangie; do not arm-twist us with your proposed plans.”

Tanzania’s investment attraction is caught up in the same quandary as that of the civil servant who squanders his $100,000 retirement cash by investing in lofty ‘you will make money’ plans.

In fact, Mr Mtaka generously advised that Treasury bonds are sure-fire investment options for retired pensioners… But, it is not that we do not agree with him.

We in Tanzania want money to invest, and make all the right noises on that. But, the devil is in the details. Our political environment is not investor-friendly, as everyone knows that our politics do not follow the laid-down investment policies and regulatory frameworks.

The regime has popularised such terms as “wawekezaji uchwara” (fake investors), and made Tanzanians see investors in a light that is not positive. There is no doubt that fake investors do indeed exist.

But – as entrepreneur maestro Salum Awadh has pointedly put it: “Investment money behaves in two ways: it goes where it is attracted; and it stays where it is treated well.”

Can we in Tanzania look at our investment environment – and attest that it is investor-friendly? The country may be an attractive destination for tourists; but is it also an attractive destination for potential investors?

Prospective investors want to know that a judge of the local High Court will make decisions firmly based on law and justice, and nothing else short of that.