Investments under EPZ, SEZ schemes create 36,000 jobs

ALVAR MWAKYUSA

INVESTMENTS under Export Processing Zone (EPZ) and Special Economic Zone (SEZ) schemes stood at 1.422 billion US dollars (about 3tri/) as of December 2015, generating 1.1 billion dollars (over 2.3tri/-) in foreign exchange earnings.

The investments represent an increase from 1.292 billion dollars (2.7tri/-) recorded in the previous year, with export earnings totalling 794 million US dollars (about 1.7tri/-).

The investments, undertaken by both local and foreign investors at the industrial parks have created 36,277 direct jobs, according to figures by the Export Processing Zones Authority (EPZA).

Following the impressive achievements, some Tanzanian diplomats in foreign missions have asked local government authorities in the country to allocate enough land for the setting up of industrial parks as well as improved incentives to woo foreign investors.

The newly appointed envoys made the recommendations in Dar es Salaam yesterday after a tour of the government-owned Benjamin William Mkapa Special Economic Zone that hosts 19 factories at Mabibo area.

“Some regions have already allocated land for the special economic zones and it’s high time other regions followed suit to attract investments in their areas,” Tanzania’s Ambassador to Kenya, Dr Pindi Chana observed.

The delegation also included Ambassadors Omar Yusuf Mzee (Algeria), Fatma Rajab (Qatar), Grace Mgovano (Uganda) and Matilda Masuka (South Korea).

Dr Chana called for additional incentives to foreign in vestors to increase foreign direct investments and exports as well as creation of jobs and increased revenues.

“The tax exemptions are crucial in attracting investments; our neighbours in the region also want investors and competition is high,” Dr Chana observed.

Ambassador Mgovano proposed the establishment of agro-processing industries in the Southern Highland regions to tap the immense opportunities in the East African region and beyond.

“Value addition for food crops will enable us to benefit greatly because the demand for food in the region, particularly South Sudan is high. Some traders in Uganda and other countries come in Tanzania to buy unprocessed food crops which they then process and repackage in their countries for re-export.

We should ourselves add value to our produce,” she stressed. Ambassador Mzee proposed increased public awareness campaigns on the importance of tax exemptions in attracting FDIs in industrial development.

“There have been some misleading reports on the tax waivers but the truth is they play a critical role in magnetising investors who eventually create jobs and improve the economy,” he argued, calling for special treatment of potential local investors wishing to benefit from the EPZ/SEZ schemes for the country to retain profits accrued from projects in the industrial zone.

In his presentation to the diplomats, EPZA Director General Joseph Simbakalia said the country has all the required resources for a successful industrial economy.

He informed the emissaries that a study conducted by EPZA in Dar es Salaam, Arusha and Shinyanga revealed that the investors benefiting from tax exemptions actually paid more in other taxes compared to the amount they had been exempted from.

At Benjamin William Mkapa SEZ yesterday, the diplomats visited Tooku Tanzania Garments Limited, which produces denim fabrics for major global brands like Wrangler, Levis and Primark.

The industrial unit employs over 2,000 workers. It sells its products in the United States under the African Growth and Opportunity Act (AGOA) arrangement and also exports to other American and European markets.

Since EPZA became effective nine years ago it has issued 140 licences for EPZs, some of which are located within industrial parks and others in their own factor units outside the parks.

Official records show that of the companies in the industrial zones, 44 per cent is owned by locals, 42 per cent by foreigners and joint ventures between locals and foreigners account for 10 per cent.