TIC, Investors ink Sh4.2 trillion deal to reduce goods imports

 

The minister for Investment, Industry and Trade, Dr Ashatu Kijaji PHOTO| COURTESY

By Gadiosa Lamtey

Summary

·         The investment would be poured into 10 industrial production projects as part of efforts to significantly create jobs, reduce imports, and save foreign currency.

Dar es Salaam. The government said yesterday that the $1.805 billion in performance contracts signed between Tanzania Investment Centre (TIC) and investors aimed at addressing the shortage of important commodities, including edible oil, sugar, cement, and iron rods.

The investment, which is equivalent to Sh4.24 trillion, would be poured into 10 industrial production projects as part of efforts to significantly create jobs, reduce imports, and save foreign currency.

The import substitution projects involved in the deal include investments and reinvestments in eight new and two already existing projects, respectively, in the agriculture, energy, industry, and manufacturing sectors.

In April this year, the Sugar Board of Tanzania (SBT) issued permits to importers to bring into the country 30,000 tonnes of sugar, which was half of the 60,000 tonnes that were imported last season, signalling a significant increase in self-sufficiency. Importation is set to decline once the projects get underway.

However, the country spends an average of Sh470 billion every year to import 205,000 tonnes of edible oil in order to close the gap.

The country’s annual demand for cooking oil stands at 570,000 tonnes against 365,000 tonnes of domestic production.

Beneficiary companies are Lake Cement Ltd, OilCom, Lodhia Steel Ltd, MW Rice Milers Ltd and Sinotan Kibaha Industrial Park.

Others are Wildflower grain and edible oil Mills, Mufindi Paper Mills, Greenfield Sugarcane, Kilombero Sugar, Lodhia Steel, and Dangote Cement.

Speaking after witnessing the signing, Investment, Trade and Industry Minister Ashatu Kijaji said the projects will generate 16,355 direct jobs. “These projects are strategically intended to reduce the imports of products like sugar and oil,” she said.

“We will also improve the country’s economy through the utilisation of foreign current reserves to import more useful things like capital goods instead of the said products,” she added.

Dr Kijaji insisted on the need for investors to execute the projects according to contractual agreements, asking them to amplify notable obstacles for amicable resolutions. She said the sweeping business reforms as well as various incentives issued by the government recently have helped attract investors.

According to her, Tanzania’s annual steel demand stands at 550,336 tonnes, a demand that cannot be met locally.

Kilombero Sugar managing director, Mr Guy Williams, said the investments have come at the right time as the company was implementing an investment plan to increase productivity.

He said the company was impressed with the conducive business environment created by the government, making Tanzania a rapidly growing market following rapid population growth.

“We are promising to work hard to ensure the project is completed on time and start thinking about new ventures,” he said.

Sinotan Kibaha Industrial Park chairman Janson Huang commended the government’s cooperation extended to investors through TIC.