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Interview With Gilead Teri Executive Director of The Tanzania Investment Center (TIC)

Interview with Gilead Teri Executive Director of the Tanzania Investment Centre (TIC)

In this exclusive interview with TanzaniaInvest, Gilead Teri, the Executive Director of the Tanzania Investment Centre (TIC) — the primary agency of the government tasked with coordinating, encouraging, promoting, and facilitating investment in the country — offers an in-depth exploration of Tanzania’s investment landscape and opportunities.

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Teri begins with an overview of key economic sectors and then delves into the transformative impact of the 2022 Investment Act, detailing how it reshapes the investment framework to better accommodate both domestic and international investors.

The discussion then extends to the most promising areas for investment and specific investment opportunities. It reveals the strategic advantages and incentives that position Tanzania as a pivotal investment hub in Africa.

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This comprehensive interview is a must-read for anyone seeking detailed insights into Tanzania’s dynamic business environment and the numerous opportunities it presents.

Key Economic Sectors

Tanzania has plenty of natural resources and endless investment opportunities in an array of sectors. Can you highlight the most interesting and promising sectors?

The scope of our economy is very broad. Tanzania is one of those few countries in Africa where you can pretty much invest in anything and everything.

“Tanzania is one of those few countries in Africa where you can pretty much invest in anything and everything.”

About 25% of our GDP is agriculture and that’s why it’s considered the backbone of our economy. A lot of Tanzanians engage in farming, especially smallholder farming.

About 10% of our GDP is in the extractive industry, so quite a significant mining sector, which has both large-scale as well as small-scale miners.

We manage significant transit trade that flows from the port of Dar es Salaam, the port of Zanzibar, the port of Tanga to the broader East African region and the western seaboard of the Indian Ocean.

We have a very strong tourism offer that drives close to two million tourists every year.  About a third of our country is reserved national parks, game reserves, as well as protected areas, including marine parks.

We have also a very important manufacturing base given our population of 62 million. We are the only country to be simultaneously a member of the East African Community (EAC) and the Southern African Development Community (SADC) which gives us access to over 450 million people. That makes us a very interesting base of operation for manufacturing and unsurprisingly it is one of those sectors that we’ve seen growing quite fast.

The last sector I would highlight is the real estate and construction industry because given not only the large-scale government projects but also a huge housing demand that is boosting the growth of the construction section as well as the demand for building materials.

Investment Framework

In the Rand Merchant Bank list of top 10 investment attractive African countries in 2021, Tanzania was ranked 10th, and in the KPMG Doing Deals in Sub-Saharan Africa survey Tanzania was the 3rd most preferred destination. How has the Investment Act of 2022 improved things and what would be your most honest assessment of the investment framework?

The 2022 Investment Act has done two major things.

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Firstly, it has made it quite clear for investors what are the support and facilitations that they will get from the Government of Tanzania. This has put some of the things that were done in practice actually into law and laid down the processes. 

Secondly, it has also provided an opportunity for domestic investors to access incentives when they want to expand or rehabilitate their projects. Previously, the law only acknowledged new investments coming into the country. So the law recognizes and caters to our number one champions:  investors that are already in Tanzania.

Furthermore, the new Investment Act has created a premium for large-scale investors investing over $50 million. They can negotiate the incentives with the Government of Tanzania based on their business model.

“The new Investment Act has created a premium for large-scale investors investing over $50 million. They can negotiate the incentives with the Government of Tanzania based on their business model.”

Investors can ask for additional, tailored incentives beyond the standard incentive packages, and these get approved formally so they are legally recognized. This provides a very solid process for top dollar investments coming into Tanzania and is something no other country in Africa provides.

Investment Incentives Via TIC

Can you mention the main incentives available to investors and clarify how TIC operates?

When you want to invest in Tanzania, the first thing we request is that you register with the Tanzania Investment Centre—the one-stop shop for investors in the country—and bring us your business plan, model, and proof of investment capital.

“When you want to invest in Tanzania, the first thing we request is that you register with the Tanzania Investment Centre—the one-stop shop for investors in the country—and bring us your business plan, model, and proof of investment capital. We then provide you with a Certificate of Incentives which helps access incentives and benefits to make investment easier”

We then provide you with a Certificate of Incentives which helps access incentives and benefits to make investment easier, such as:

– Zero import duties on importing capital goods like machinery

– 75% reduction in import duties on “deemed capital goods” – goods that could be end products for one industry but are capital goods for another (e.g. furnishings for a hotel)

– VAT deferment – pay import VAT 3 months after importing

– Reductions in corporate income tax for certain sectors, like pharmaceutical and textile manufacturing from 30% to 20%, and in assembly lines (motor vehicles, tractors, and fishing boats) from 30% to 10%

– 100% capital allowance tax deductions for investing in agriculture

– 50% capital allowance for hotel and tourism projects

– Additional tailored incentives negotiated for large investments over $50 million.

The certificate also helps you protect your capital when investing in Tanzania. We aim to make it easy for investors to set up operations rather than waste time and money trying to navigate processes.

Given the new Investment Act, and the revived commitment of TIC to welcome and assist investors, we have greatly increased the number of investment projects that we register.

When we look back a couple of years ago at the FDI that has come into the country, we’d find it to be about $2 billion.

This year (2023), we are on track to register $4 billion worth of investment projects. This means that next year, the realized FDI should be $2-2.5 billion. In August this year alone, we registered $938 million in projects – a number that previously would’ve taken us six months to reach. Our project registration numbers have shot up significantly since reforms – we now consistently register over new 50 projects per month, with a high of 58 in August 2023 versus 36 in August 2022.

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About 40-50% of the investment we are registering now is from Tanzanians or joint ventures between Tanzanians and foreigners, so we are also seeing quite significant growth in domestic direct investment as well.

Investment Opportunities & Projects

Are there any other key sectors or subsectors and projects that the country and TIC are particularly keen on?

We have identified five key products that we are focused on producing here and substitute expensive imports.

1. Sugar – we are on track to be 100% self-sufficient in sugar next year

2. Fertilizers – a critical input for the agriculture sector

3. Edible oils

4. Medicines and medical products – we spend about $1 billion annually importing these

5. Beef and meat products – growing demand for proteins

To attract investments in those areas, we are ready to go out of our way to ensure investors are comfortable and successful.

For example, for pharmaceuticals, the Medical Stores Department has a policy of buying 100% of needed pharmaceutical products from domestic producers first before importing. This guaranteed government uptake makes us the best country in Sub-Saharan Africa for pharma investment.

In addition to all that, we have shovel-ready projects in infrastructure and energy from different government entities that are seeking investment partners. The main ones are:

Renewable energy projects like solar and hydro that the national power utility TANESCO is keen on

Electricity distribution projects – Tanzania is now working with private partners on power distribution networks

Port infrastructure projects – ports looking for private sector funding

Other infrastructure like pipelines, highways, and railways connecting mining zones.

We have details on all these projects on our website and are happy to share more project links with TanzaniaInvest as well to help connect potential investors.

Interview Gilead Teri of TIC with TanzaniaInvest
Gilead Teri (left), Executive Director of TIC, in conversation with Eric Tirabassi (right), Chief Editor of TanzaniaInvest.

Message of Confidence

What would be your message to welcome investors and make them feel at ease about investing in Tanzania?

The number one thing investors look at before deciding to enter a country is its leadership and whether leaders really understand and support business and the economy.

Tanzania has one of the most economically progressive presidents on the continent, Her Excellency Dr. Samia Suluhu Hassan. She is a champion of private sector investment and truly understands how business operates and what needs to be done to create an enabling environment. She actively welcomes and engages with investors and the private sector.

“Tanzania has one of the most economically progressive presidents on the continent, Her Excellency Dr. Samia Suluhu Hassan. She is a champion of private sector investment and truly understands how business operates.”

Beyond leadership, Tanzania offers:

– Political and macroeconomic stability – low debt, low inflation

– Favorable geography and demographics to support economic growth

– Reforms to infuse government institutions with private-sector thinking

– A vision to open up and integrate into regional and global markets

For all these reasons, we welcome everyone who wants to make money investing in Tanzania for the next 100 years!

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