Tanzania investments jump 52.4 percent to reach Sh2.8 trillion in three months

 

By Alex Nelson Malanga

Business journalist

Summary

·         Tanzania attracted investment worth $1.2 billion (about Sh2.8 trillion) compared to $787.4 million (Sh1.8 trillion) recorded in 2022, according to TIC

Dar es Salaam. Tanzania recorded a 52.4 percent increase in investment during the first quarter of this calendar year compared to a similar period last year, thanks to an improvement in the business climate.

Through the projects registered under the Tanzania Investment Centre (TIC) from January to March, Tanzania attracted investment worth $1.2 billion (about Sh2.8 trillion) compared to $787.4 million (Sh1.8 trillion) recorded in 2022.

The investment, according to the latest TIC report availed to the media yesterday, will be made in 93 projects that are set to create more than 16,400 job opportunities.

Massive investments came from domestic sources, which contributed $887 million or 76 percent of the total approved investments.

The foreign sources contributed $276 million or 24 percent.

A positive investment growth was mainly driven by the robust performance of the construction/commercial buildings sector that soared by recording an impressive investment worth $333. 2 million.

TIC executive director Gilead Teri attributed the handsome performance to the ongoing government’s efforts in creating an enabling business environment.

He said Tanzania’s return to international arbitration following changes in the Tanzania Arbitration Act (R.E. 2020) marks another important step in reform journey aiming at cementing the country’s place as a top investment destination on the continent.

Other indicators have remained solid - the transport and logistics index is strengthening, thanks to the ongoing mega-infrastructure projects.

Again, said Mr Teri, the cost of electricity at $ 8.45KwH (medium voltage) and $6.65KwH (high voltage), is the lowest compared to all regional peers - Eastern and Central Africa.

“Our talent pool is growing and our World Bank Public Sector Digital Transformation Index is the highest in the region,” said Mr Teri in the TIC Monthly Investment Bulletin (March).

He went on to add: “Reforms are happening and the impact is reflecting on our monthly numbers.”

On the monthly basis, Tanzania is set to record a 135 percent increase in investment in the projects registered by the TIC in March this year compared to February.

According to TIC, the capital expected to be invested increased from $339 million in February to $796 million registered in March .

This is despite the fact that the trend indicates a 9.8 per cent decrease in the number of the registered projects under the period of review.

In comparison to the 41 projects registered in February 2023, there were 37 projects registered in March 2023.

Of the total projects recorded in March, 50 percent are owned by local investors, 31 percent by foreigners and 19 percent are joint ventures.

The Transportation sector emerged the dominant player, with approved investments totaling $393.96 million, a 349 per cent increase from the corresponding period last year.

Commercial building and manufacturing sectors came second and third respectively after attracting $ 318.21 million and $52.04 million in investment.

The majority of the projects registered in March 2023 were new projects accounting for about 89 percent of the total registration while the expansion/rehabilitation projects accounted for about 11 percent.

The projects registered last month, according to the report, are expected to generate 7,714 new job opportunities in the country.

The top five leading sources of FDI in March 2023 are China, USA, Mauritius, Spain and India.