Better times ahead as investors head to TZ

The Executive Director of the Tanzania Investment Centre (TIC), Ms Juliet Kairuki.PHOTO|FILE 

By Samuel Kamndaya ,The Citizen Reporter

In Summary

She did not go into details, but her views are based on the fact that Tanzania is a growing oil and natural gas market with exciting prospects, including 19 exploration blocks.

Dar es Salaam. Four per cent growth in inflows helped Tanzania maintain its position as the leading destination for Foreign Direct Investment (FDI) in East Africa last year – and East Africa’s second largest economy appears set for even better times.

 

The country attracted FDI to the tune of $1.872 billion in 2013, $72 million more than the 2012 inflows, fresh data shows. The World Investment Report (WIR) 2014, published by the United Nations Conference on Trade and Development (Unctad), indicates that between the 1990s (when the country started tracking its inflows) and 2013, Tanzania has accumulated FDI stock worth $12.7 billion to settle comfortably as the leader in the region.

Uganda comes second with FDI stock of $8.8 billion while Kenya, Rwanda and Burundi come third, fourth and fifth with stocks of $3.4 billion, $854 million and $16 million respectively. The Executive Director of the Tanzania Investment Centre (TIC), Ms Juliet Kairuki, was excited beyond words on learning of the development. “No news can be better than this,” she told The Citizen on the phone yesterday.

The figures, she said, were a clear indication that Tanzania’s investment policies were attractive. “It shows that everyone, including the Prime Minister’s Office--which is responsible for investment--has worked tirelessly to implement investment-friendly reforms during the past few years,” said Ms Kairuki.

Gas and electricity, mining and quarrying as well as manufacturing and services have been the major sources of FDI in the past few years.

Looking ahead, Ms Kairuki--a seasoned public private partnership (PPP) consultant who rose to the helm of TIC management mid-last year following the retirement of Mr Emmanuel ole Naiko--sees only better times ahead. “We expect a number of projects in 2014 in oil and gas exploration and in mining and quarrying,” she told The Citizen.

She did not go into details, but her views are based on the fact that Tanzania is a growing oil and natural gas market with exciting prospects, including 19 exploration blocks.

Analysts predict that some $10-20 billion will be injected in the sector in the coming decade. Exploration in Tanzania’s deep offshore waters have in the past two years led to the discovery of 45 trillion cubic feet (tcf) of natural gas. More discoveries are likely as drilling opportunities unfold. It is estimated that recoverable reserves will more than double to 100 tcf by the end of 2015.

Paradoxically, investment in agriculture, which employs the majority of the country’s working-age population, does not appear to be of great interest to investors, According to Ms Kairuki, the problem stems from the fact that financiers consider rain-fed agriculture too risky.

“Agriculture is derailing because it is perceived and termed as a risky sector by investment financiers due to its dependence on rain as well as the underdevelopment of the infrastructure (power, roads), processes in land access and tenure modalities,” she said in an e-mail to The Citizen.

The cure for this predicament, she said, lies in TIC’s long-term grievance--putting in place a functioning investment land bank. The 2014 World Investment Report, “Investing in Sustainable Development Goals (SDGs): An Action Plan”, says that after the 2012 slump, global FDI returned to growth, with inflows rising nine per cent to reach $1.45 trillion in 2013.

Unctad projects that FDI flows could rise to $1.6 trillion in 2014, $1.7 trillion in 2015 and $1.8 trillion in 2016, with relatively higher rates in developed countries. According to Unctad, 2013 inflows rose in Eastern and Southern Africa.