Tanzania FDI Drop in 2018 Due to Removal of Financial Incentives

A report published by the National Bureau of Statistics of Tanzania (NBS) indicates that in 2018 the Tanzania Investment Center (TIC) registered a total of 215 projects compared to 345 projects in 2017.

The total value of the projects registered in 2018 decreased by 44.4% to USD 2.82 billion, from the USD 5.07 billion in 2017.

The report explains that the decrease was due to the removal of financial incentives to expansion projects and basic non-capital goods.

Of the projects registered in 2018, 69 were owned by foreign investors, 132 by Tanzanians, and 14 were joint ventures of Tanzanians and foreigners.

However, in 2017, the TIC registered 168 new projects of foreign investors, 84 Tanzanians, and 85 venture projects.

The projects registered in 2018 generated 27,469 new jobs compared to 30,728 in 2017, equivalent to a decrease of 10.6%.

In 2018, the business services industry took the lead in registering projects worth USD 1.07 billion, followed by manufacturing with USD 0.63 billion; agriculture with USD 0.5 billion; commercial buildings with USD 0.22 billion; and freight transportation with UAD 0.17 billion.

In 2018, the Dar es Salaam region took the lead in attracting investments with 109 new projects being registered.

This was due to the existence of a conducive investment environment, particularly good infrastructure compared to other regions.

Tanzania FDI
According to the UNCTAD 2019 World Investment Report, in 2018 the FDI inflow in Tanzania reached to USD 1.10 billion, representing an 18% increase compared to 2017 (USD 938 million), and a 30% decrease from the peak reached in 2015 at USD 1.56 billion.

The mining sector, the oil and gas industry, as well as the primary agricultural products sector (coffee, cashew nuts, and tobacco) drew most FDI.

The top five providers of FDI into Tanzania are South Africa, the UK, Kenya, Canada, and China.