The news that Tanzania took the lead in attracting foreign direct investment (FDI) in the East African region during the past 12 months, attracting a record $1.1 billion (Sh1.76 trillion), is good for the country, considering the difficulties we weathered during the period.
According to the World Investment Report (WIR) which was launched in Dar es Salaam on Friday, between June 2011 and June 2012 Tanzania overtook Kenya - the region’s biggest economy - indicating the confidence foreign investors have in Tanzania.
The report, which has been commissioned by the United Nations Conference on Trade and Development (UNCTAD) focusing on the past twelve months ending last month, shows that for the past three years Tanzania has attracted about 47 percent of all FDI flows in the five East African Community member countries.
Tanzania is East Africa’s second biggest economy behind Kenya, thus attracting more foreign investment flows bodes well for the country.
We at The Guardian on Sunday take this opportunity to congratulate the Tanzania Investment Centre for this achievement. We call it an achievement because during the very period under review the country had to contend with a crippling power-rationing regime, which adversely impacted the economy.
The economy also performed poorly owing to other internal and external factors, including spiralling inflation which is surging to a record 24 percent.
During the period our shilling nosedived in value against major international currencies, especially the US dollar and the euro, thus hurting imports of goods and services - with oil accounting for about 50 percent of the total import bill.
But, despite all this depressing backdrop, TIC managed to attract a whopping $1.1 billion, surpassing all the four East African Community countries. Now we would like to challenge TIC to aim higher and rake in more foreign investments for the simple reason that there are still more untapped investment opportunities in Tanzania, especially in agriculture, real estate, tourism and manufacturing sectors.
Today if a foreign investor builds a factor in Tanzania, they not only target 42 million-plus Tanzanians but the combined 100 million-plus people of the East African region.
This is the message we should be taking to the rest of the world because Tanzania is geographically the hub of the EAC region - with access to all four major means of transport, namely sea, road, rail and air.
If Tanzania improved Dar es Salaam port as well as revived the central and southern railways, it would easily position itself as the most attractive investment destination in the bloc. Above all, there should be reliable and affordable electricity if the country wants to attract more investments.
This way investing in Tanzania would mean accessing the rest of the EAC region. However, for TIC to convince more investors to come to Tanzania, the government should abolish all barriers that hinder doing business in the country, including bureaucratic red tape, corruption, an unfair tax regime and dilapidated infrastructure.
Lest TIC rests on its laurels, it should be noted that Tanzania is still the most expensive in the region in terms of doing business. Since investors are not running charity organisations, but in business to make a profit, they will be ready and willing to invest where there’s a high possibility of making more profits.
The challenge for TIC is to ensure that investments coming to Tanzania have a positive impact on all Tanzanians. Massive investment flows in the country without corresponding positive impact on the majority of Tanzanians would simply not make sense at all.