Zanzibar aims to register 150 investment projects annually

Unguja. As infrastructure and the business environment improve, Zanzibar plans to register at least 150 investment projects each year through the Zanzibar Investment Promotion Authority (Zipa).

The announcement was made on Monday, January 5, 2025, by the Zanzibar’s Minister of Labour and Investment, Mr Shariff Ali Shariff, during Investment Day dialogues at the ongoing Zanzibar International Trade Fair (ZITF) at the Nyamanzi Exhibition Grounds in Unguja.

“The government plans to register no fewer than 150 projects annually, which amounts to 600 projects over the next five years,” he told participants.

“We are ready and organised to ensure Zanzibar’s investment and business environment is strengthened.”

He added that in the previous period, 560 projects were registered, attracting $6.8 billion in capital and creating over 28,000 jobs.

“We already have a One-Stop Centre at Zipa, which provides comprehensive support to investors, including company registration, construction permits, land ownership certificates, and residential permits,” he said.

He noted that work permits, which previously took up to 30 days, can now be issued within a single day, or in some cases, just a few hours.

Minister Shariff emphasised that the economy depends heavily on investors and that the government will ensure proper oversight to attract more investment to Zanzibar.

He said the 2023 Investment Law is investor-friendly but noted that some provisions require accompanying regulations, particularly regarding the construction of commercial and industrial buildings, to strengthen industries, boost attractions, stimulate the economy, and create jobs.

However, he acknowledged that domestic investors still face challenges, particularly the perception that investment opportunities are primarily for foreigners.

Measures have been introduced to provide local investors with greater incentives, setting the minimum investment for domestic investors at $50,000, compared with $500,000 for foreign investors.

“Domestic investment will become more robust. Citizens should seize the opportunities,” he said.

The Zanzibar National Chamber of Commerce (ZNCC) executive director, Mr Hamad Hamad, said the dialogue offered valuable insights for businesses and noted that these targets could be achieved, given the government’s proactive planning to attract investors.

“What is crucial is to preserve our environment and culture, because as more investors arrive, heritage and sustainability can be compromised,” he said.

Mr Hamad added that while foreign investment is emphasised, priority should be given to locals, as domestic businesses remain and create permanent jobs. Therefore, they should be encouraged and incentivised.

He also stressed the need for closer cooperation between government institutions and the private sector, citing communication gaps when laws and regulations are amended.

“For instance, changes are not always directly communicated to the private sector, leaving businesses uninformed,” he said.

He also highlighted predictability as key, “Investors need to know what to expect over time. Unexpected changes create an unpredictable environment, which is not ideal for investment.”

The Zanzibar Revenue Authority (ZRA) Commissioner for the Large Taxpayers’ Department, Mr Shaaban Jafar Jumanne, said the reduction of VAT from 18 percent to 15 percent is intended to attract investors.

He added that more robust tax collection systems have been developed, as investors from developed countries prefer efficient payment processes.

“We are focusing on digital tax systems to allow investors to comply without delays. Registration and all procedures can now be completed online from the business location,” he said.

He noted that ideally, all ZRA complaints should also be handled online, enabling investors to focus on economic activities rather than office visits.

The Zipa Director of Investment Planning, Mr Al Haji Jecha, recommended establishing ZRA offices at Zipa to provide convenience for investors registering projects, ensuring all services are available in one location.