Public-Private Collaboration is Key in Enhancing Investment in Tanzania

Given ongoing developments in the investment space, Tanzania is increasing efforts to improve the country’s business climate and attract more domestic and foreign investors. As one of the first directives upon assuming office, President Samia Suluhu Hassan called for government officials to promote and drive investment and trade and expand the tax base. These remarks from Her Excellency were met by strong support from the business community, and the world has continued to witness changes being implemented, most recently being the tabled Tanzania Investment Act 2022.

Representing Private Sector leaders, the CEO Roundtable of Tanzania (CEOrt) continues to facilitate enhanced public-private dialogue towards policy and regulatory reform for Tanzania’s sustainable development. Members of the CEO Roundtable recently engaged with the Ministry of Investment, Industry and Trade to discuss the role of the Private Sector in supporting the country's socio-economic development through investment and trade. This provided an opportunity to voice some of the overarching issues within the investment space while exploring how the Private Sector can participate in identifying and promoting the right investment opportunities within Africa in order to continue to drive Tanzania’s growth trajectory.

Tanzania is on a path towards transforming the economy through investment and trade, supported by the efforts being made to create a friendlier business environment. Speaking at the CEOrt members’ meeting and representing the Minister of Investment, Industry and Trade Hon. Dr. Ashatu Kijaji, Deputy Minister Hon. Exaud Kigahe reiterated that a key priority for the Government is to boost investor confidence and create a stable and predictable investment climate where businesses can thrive. The new Tanzania Investment Act 2022 aims at facilitating an enabling environment, and mirrors the President’s pro-business approach, which is sending positive signals about the nation’s investment outlook. The new law is meant to not only promote local participation in the economy, but also encourage and attract more foreign trade and investments. Some of the notable recommended changes in the law include the reduction of capital requirements for a locally owned business by 50%, offering tax incentives, and having this Act serve as the supreme legislation for all investment matters. 

With regards to some of the changes being implemented to improve conditions for foreign investors, Hon. Kigahe mentioned efforts to relax regulations for foreign work permits and streamline VAT refunds. Membership within the CEOrt includes CEOs from 200 leading companies in Tanzania, cutting across multiple sectors of the economy and operating across multiple countries. Tapping into their experience and expertise, members discussed the significant opportunities available to drive increased Foreign Direct Investment into the country. Mr. Jayesh Shah - Managing Director of Sumaria Group - acknowledged that the business community is grateful for the positive changes seen thus far, and shared recommendations for further enhancing the investment climate. These included amending property laws to allow non-citizens to own land, as it is an asset that cannot be taken out of the country. Other recommendations were on putting ideas on the Blueprint for Regulatory Reforms To Improve The Business Environment into actual practice, and reviewing penalties to ensure they match the charge.

These sentiments on reviewing regulations to create a more friendly business and investment climate were echoed by several members. Ecobank Tanzania’s Managing Director Mr. Charles Asiedu reinforced the positive outlook Tanzania has, stating that it is one of the best-run economies in the world, with fertile lands all around and an inflation rate less than 5%. He agreed that the country is on the right track with opening up the economy, and taking another look at some of the investment laws could result in a spike in growth rates. Group Managing Director & CEO at Karimjee Jivanjee Group & Toyota Tanzania Limited, Mr. Vinod Rustagi also contributed to the discussions recommending amendments to the  employment laws, whereby a scheme is introduced to allow senior officials employed at group level to work in multiple subsidiaries without having to seek additional permits.

Responding to a question from Tanpack Tissues Limited CEO Mr. Rajesh Shah on the ongoing water scarcity in Dar es Salaam and its adverse impact on production capabilities, Deputy Minister Kigahe assured the Private Sector leaders that discussions are ongoing with the respective ministries to align on supply in order to support businesses, not just in terms of water but also electricity and other infrastructural requirements. The Government is keen on driving investments in identified key priority sectors which include manufacturing.

As a facilitator of investments in the country for sustainable economic development, the Tanzania Investment Centre (TIC) is working in partnership with other governing bodies to implement this industrial driven economy in the country. CEOrt Chairman and PwC Tanzania Country Senior Partner Mr. David Tarimo spoke for the TIC being granted more authority, a topic that has been in discussion for quite some time. The agency helps to maintain consistent conducive economic governance reforms, and is an avenue for investors to channel any significant challenges they experience for resolution.

According to the RMB report on “Where to Invest in Africa 2021”, Tanzania ranks in the top ten of investment-attractive African countries. There is global recognition that Tanzania has been on a rapid path of development over the past few years, with growth that can be attributed to consistent public investment from the government in key secondary and tertiary sectors, ranging from the energy sector to advancements in the telecommunications and finance sectors. Our country’s geographic location also offers an advantage in comparison to our landlocked neighbours - Tanzania is well positioned to influence trading policies, with transport corridors that can expand development opportunities for East and Southern Africa. CEOrt members called for us to be more ambitious as a country and go for a spot in the top three.  Mr. Taha Jiwaji , CEO Beem Africa, suggested the adoption of an aggressive marketing strategy to showcase Tanzania as a destination for investment.

From the recent census results, Tanzania has a population of over 61 million people thus needing strong development strategies to meet social services needs. There is reliance on the Private Sector to support sustainable development, including collaboration with the Government to improve the provision of public services,  skilling the youthful population and empowering them to become productive members of society, and contributing to job creation overall. The vision of enhanced investment is one that depends on continued joint efforts to realise it. As also pointed out by Mr. David Tarimo, we should be looking at how to increase involvement of Tanzanians in the diaspora.

Concluding the session, Hon. Kigahe appreciated the importance of this dialogue as it made way for valuable feedback to shape future reviews for further discussion and implementation. The sixth phase Government has been very open to public-private dialogue, and continues to take real consideration of all the comments shared by the business community. The Deputy Minister confirmed that efforts to keep attracting investments are ongoing, with the President also playing a key role in marketing the country. The Public Sector is committed to working on the suggestions and challenges shared, accommodating ideas where possible so that public-private partnership can move forward towards enhancing investment in Tanzania.

CEOrt members collectively contribute to the economy through tax collection, employment, capacity building, technology transfer and skills development. The Government’s intention is to ensure a friendly climate for all investors, as it is the success of these businesses that will share the message with the world that Tanzania is open for business, and it is where investments go to grow.