Tanzania Under-utilization of Online and Delays in Awarding Incentives Discourages Investments, Controller and Auditor General Says

Charles Kichere CAG Tanzania

Tanzania’s Controller and Auditor General (CAG) Charles Kichere recently submitted the Annual General Report of Public Authorities and Other Bodies for the year 2020/21 to President Samia Suluhu Hassan.

The report looks into all significant audit matters relating to financial statements of Public Authorities and Other Bodies (PAs & oBs), controls for operations and operational efficiency of the Entities in implementation of the mandate in which they were established.

It also depicts operational efficiencies of Regulatory Bodies, Water Authorities, and Higher Learnings Institutions and assessment regarding extractive industry sector, tourism sector, Government Banks and Other Financial Institutions and investments undertaken by PAs & oBs.

A specific section of the report is dedicated to the operational review of public entities mandated to promote, facilitate and coordinate investments in Tanzania.

The entities include Export Processing Zone Authority (EPZA), Centre for Agricultural Mechanization and Rural Technology (CAMARTEC), Tanzania Commission for Science and Technology (COSTECH), Small Industries Development Organization (SIDO), and Tanzania Investment Centre (TIC).

From the review of operations of these entities, Kichere noted several deficiencies, related in particular to TIC.

Specifically, he noted the under-utilization of online and visual platforms to promote investments, and constraints in awarding strategic investment incentives and benefits to investors.

Under-utilization of Online and Visual Platforms to Promote Investments

The reviewed information on TIC’s initiatives in promoting investment opportunities through online platforms indicates that the Centre is not fully utilizing the online platforms.

The report notes that TIC had produced only one Swahili investment promotion video documentary aired in November 2017; it had not uploaded the Client Service Charter in the Tanzania Investment Window (TIW) system for stakeholder awareness; and its service pack guide for permits, license, and registration requirements were not published on its website.

Constraints in Awarding Strategic Investment Incentives and Benefits to Investors

When reviewing the incentive award and additional benefits to prospective investors as of 30 June 2021, Kichere noted that 19 investments approved by National Investment Steering Committee for additional benefits from the year 2015 were not gazetted to finalize and legalize the benefits awarded. This implies a delay of six years.

He further noted that six investors who filed strategic benefit applications in June 2020 had not received feedback up to the time of the audit in November 2021.

“I am concerned that delayed award of benefits to either strategic or major investments, discourages investments and hinders economic growth,” Kichere stressed.

In order to improve on these shortcomings and enhance investment promotions, the CAG recommends that TIC increases the utilization of online and visual platforms in collaboration with other stakeholders, and resolve the existing constraints to speed up the award of benefits to qualified investors.