Tanzania foreign direct investment is expected to grow 10 percent this year from $13 billion in 2012, as China replaced USA as the fourth-largest investor in the East African nation’s economy.
China who was not among the top 10 investors in Tanzania in 2011, contributed $1.4 billion ahead of the USA investment of $950 million acting Tanzania Investment Center Executive Director Raymond Mbilinyi said in an interview in Dar es Salaam.
“We also have new projects we expect to register in the course of the year in the sectors of agriculture and infrastructure,” he said.
Tanzania, East Africa’s second biggest economy, in January hired Citigroup Inc. to assist with securing a sovereign credit rating before it sells its first Eurobond.
Tanzania vies with Mali to be Africa’s third largest producer of gold and has so far confirmed 33 trillion cubic feet of natural gas.
In September 2011, Sichuan Hongda Co. a Chinese Zinc producer and Tanzania signed a $3 billion agreement to develop coal mining and steel production projects.
The Export-Import Bank of China loaned $1.2 billion to build a 500-kilometer gas pipeline from Mtwara to Dar es Salaam. Chinese investors in Tanzania are expected to start more projects this year in agriculture, infrastructure and manufacturing, Mbilinyi said.
The UK topped the country’s FDI list last year with $4.7 billion from companies including BG Group Plc and SABMiller Plc. SAB India invested $1.8 billion.
Poor infrastructure has made Tanzania a high-cost business area. “It is true we have problems in infrastructure, which is not good for our investment climate, but we now want to turn these problems into opportunities,” Mbilinyi said.
With the discovery of gas Tanzania’s foreign direct investment is set to increase interests from all sectors and corners of the globe. The gas finds will result in trickle effects to other sectors of Tanzania’s emerging economy; tourism, agriculture, mining, telecommunications and banking to name a few.
