Japanese firm explores investment in Tanzania

28Feb 2016
Correspondent
Guardian On Sunday
Japanese firm explores investment in Tanzania

JAPANESE conglomerate Toyota Tsusho Corporation has shown intent to diversify from automobile industry and invest in other sectors in Tanzania.

Toyota headquarters in Toyota City, Japan

The company’s executives were recently in Tanzania to explore investment opportunities in the energy (wind & geothermal), manufacturing (textile & meat processing), agriculture, infrastructure, and health sectors as the company ramps up its local portfolio of investments.

Speaking to the firm’s delegation which was received at the Tanzania Investment Centre (TIC), Permanent Secretary in the Ministry of Industry, Trade and Investment, Prof Adolf Mkenda, welcomed Toyota Tsusho’s interest in the Tanzanian projects, adding that the country was currently looking forward to increasing foreign investments and the government was ready to help them.

“The tone of our government now is that we don’t want charity, we want people who can make money, generate employment, improve our economy and improve our exports,” Mkenda said. He emphasized how best civil servants can serve investors and not frustrate them.

“I want to make this very clear that if you are an investor and you come to Tanzania and if any official frustrates you, be it the permanent secretary or anybody else, that official has to step aside so that the country can move forward.

Public servants are servants of investors, genuine investors like the Japanese who are coming here to invest, produce and make our economy grow,” he said.

The fifth phase government under the leadership of President John Magufuli has promised to work closely with the private sector, saying that the government strongly believes in private sector partnership in creating citizens’ welfare and hence the need to come together and discuss how to cooperate to achieve Tanzania’s development objectives.

One of the priorities of the fifth phase government of Tanzania is to engage the private sector in setting up industries for production of mass consumption products such as clothes, textiles and edibles. Agro-based industries are also encouraged to be established.

These kind of manufacturing industries and those for fisheries and livestock will bring quick wins for farmers and raise income for rural communities that form the largest percentage of the population.

An influx of foreign direct investment (FDI) is seen as critical in creating new jobs and boosting exports that in turn earn foreign exchange. For many years Tanzania has not witnessed much increase in the flow of FDIs from Japan.

Statistical data on Japanese Investment projects recorded by the Tanzania Investment Centre (TIC) between 2011 and 2015 show that FDI inflows from Japan reached up to US$ 17.42 million. Between 2011 and 2015, TIC had registered only 5 Japanese projects.

These investments are scheduled to create about 122 jobs once all are fully operational. Amb. Awori Dennis, Toyota Tsusho East Africa chairman, said that Tanzania’s lure is its potential for the development of energy, manufacturing, infrastructure, agricultural, and health sectors.

He added that diversification from automobile is aimed at taking advantage of more investment opportunities created in the East African Community, an economic integration of five regional states.

The EAC common market is becoming increasingly important to investors, offering access to a market of 130-million people with free movement of factors of production. Toyota Tsusho's operations in Africa are firmly rooted in the region and spread to various downstream areas, such as automobile sales.

The company operates in 27 African countries where it has invested in automobile sales, energy projects, agriculture and construction machinery sales, chemicals and CKD business.

The company signed a memorandum of understanding (MoU) with the Kenyan Government in August 2012, demonstrating their intent to provide comprehensive support toward realizing the country's national vision.

As part of this agreement, the company will form project teams with the Vision 2030 Delivery Board in the automobile, power and energy, petroleum and mineral resource, environmental preservation, and agricultural industrialization fields, and advance initiatives in accordance with the vision. The company has already established a regional headquarters in Nairobi.

Toyota Tshusho’s is now keen to exploit the investment opportunities that Tanzania has to offer as the leading destination for FDI in the EAC.

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