Tanzania recently released the National Investment Report for 2023 which offers a thorough overview of the investment climate in the country highlighting current trends and developments.
Prof. Kitila Alexander Mkumbo, Minister of State, President’s Office, Planning and Investment, officially presented the Report on 11th September 2024 in Dar es Salaam during a ceremony marking the first anniversary of the establishment of its Office.
This is the first of this kind of report to be produced by the Office since its establishment in July 2023.
In his foreword Prof. Mkumbo explains that the Report will serve as an essential tool for evaluating investment statistics and trends, benefiting both investors and the nation as a whole.
The specific objectives of the Report are:
i. To assess the magnitude and direction of both domestic and foreign investments in Tanzania for the year 2023;
ii. To assess the investment climate in the country including the business environment, policies, laws, regulations, strategies, and support measures taken to facilitate local and foreign direct investments;
iii. To analyze global investment trends and the prospects of foreign direct investments (FDIs) in Tanzania, as well as to examine domestic direct investments;
iv. To examine macro-economic trends in the country and how they affect investments;
v. To assess measures taken to facilitate local and foreign direct investments in the country.
This provides pertinent information regarding the flow of foreign direct investments (FDIs) and domestic investments (DIs) in the country and outlines the measures being taken to attract and facilitate additional investments.
Key Findings
The Report points out that Tanzania registered a total of 9,678 investment projects worth US$ 8,658 million in 2023, compared to 8,401 projects worth US$ 5,658.47 million in the preceding year, equivalent to a 53% increase.
The results are attributed to the efforts made by the 6th phase Government under the leadership of the President of Tanzania, H.E. Dr. Samia Suluhu Hassan.
Under her stewardship, the country has benefited from significant strides in business reforms, including strengthening the business environment, country branding, private sector engagement, the establishment of a dedicated Office responsible for Planning and Investment, and the development of key economic infrastructure.
Notably, there has been a rising trend of investments in industrial parks and the transport and logistics industry which attracted large investments in motor vehicle assembly plants, mainly from China.
Furthermore, the report highlights a notable increase in the number of startups which rose to 843 in 2023, up from 673 in 2022, equivalent to a 25.26% increase.
This surge can be attributed to proactive Government interventions and policy reforms aimed at bolstering innovative endeavors.
Investment Opportunities
The Report also presents investment opportunities from various sectors namely agriculture, manufacturing, mining, oil and gas, construction, education, health, services, telecoms, and tourism.
The government in collaboration with development partners and the Economic and Social Research Foundation (ESRF) has developed Regional Investment Guides for 25 regions to provide investors with information about investment opportunities, procedures, contacts, and socioeconomic statistics.
The guides cover the following regions; Simiyu, Kilimanjaro, Mwanza, Mara, Kigoma, Geita, Manyara, Dodoma, Coast, Lindi, Mtwara, Ruvuma, Kagera, Tabora, Shinyanga, Singida, Arusha, Mbeya, Iringa, Njombe, Rukwa, Songwe, Katavi, Tanga, and Dar-es-salaam.
In addition to the National Investment Report, the event saw the launch of the Survey of Special Economic Zones in Tanzania, the Guideline For Development And Management Of Special Economic Zones, and the Impact Assessment Report—Blueprint for Regulatory Reforms to Improve Investments and Business Environment in Tanzania.
During the ceremony, Minister Mkumbo emphasized that his Office has achieved several key milestones within a short period, further solidifying its importance.
“We have accomplished many significant tasks and continue to achieve success. For instance, we have effectively overseen the process of drafting the National Vision 2050, with many Tanzanians now familiar with and engaged in this process, providing their input,” he said.
He also mentioned that the Office has successfully managed institutions that were entrusted to them by the President, including the Treasury Registrar’s Office, the Planning Commission, the Tanzania Investment Centre (TIC), and the Export Processing Zones Authority (EPZA).
On his part, the Prime Minister of Tanzania, Hon. Kassim Majaliwa Majaliwa who participated in the launch, commented: “The reports and tools being launched today are highly important in enhancing the investment and business environment in the country. They also provide guidance, improve procedures, and increase efficiency.”
He emphasized that these tools will assist in assessing the country’s progress by highlighting the challenges faced while also providing a clear direction for competitive and investor-friendly environments.
He also stressed that collaboration among government entities like the Fire Brigade, the Occupational Safety and Health Authority (OSHA,) and the Tanzania Bureau of Standards (TBS), would reduce the inconveniences and delays businesses face in complying with government procedures.
Additionally, he urged these institutions and local government authorities to expedite the review of various procedures and laws that would ease business operations in Tanzania, stressing that such laws should create conducive environments for investment in all sectors.
Tanzania Investment Ranking in Africa
The government of Tanzania has undertaken a number of initiatives to reform the legal and regulatory environment and promote investments.
These include the amendment of the Tanzania Investment Act to ensure the implementation of incentives given to investors; the abolishment of more than 232 fees and fines that were affecting the business environment in the country; and the amendment of 40 laws and regulations.
Recent reports from various international organizations, including the World Bank (WB), International Monetary Fund (IMF), World Intellectual Property Organisation (WIPO), and Transparency International ranked Tanzania among the best performers for attracting and facilitating investments as well as creditworthiness.
The Doing Deals in Sub-Saharan Africa Report 2023 by KMPG perceived Tanzania as a country with a positive investment climate and growth opportunities, making it one of the top choices for prospective investors in sub-Saharan Africa.
Tanzania was ranked third among the top 10 countries for future investments in sub-Saharan Africa, with a 15% share of investment attractiveness in the continent.
Moody’s Investors Service and Fitch Credit Ratings and Research also rated Tanzania with a favorable credit rating, with a rating of B1 and B+ which implies a stable outlook.
According to the South African Rand Merchant Bank (RMB) report for 2023, Tanzania has been on a rapid path of development over the past few years. In 2022, the country was among the top 10 investment-attractive countries in Africa.
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