TIC Catalysing investment and economic growth in Tanzania

TANZANIA: THE Tanzania Investment Centre (TIC) has played a pivotal role in boosting the country’s investment climate, becoming a crucial catalyst for economic growth.

Over the past few years, TIC has enhanced its strategies, making Tanzania an attractive destination for both local and foreign investors.

Streamlining the investment process

According to the TIC Quarterly Investment Bulletin October to December 2023, One of TIC’s significant achievements is the simplification of the investment process.

In recent years, TIC has introduced a one-stop centre that consolidates services from multiple government agencies, significantly reducing the time and bureaucracy involved in setting up a business.

According to the TIC Executive Director Mr Giliead Teri, the initiative has led to a dramatic increase in investment applications.

For example, in 2023, TIC recorded a 25 per cent increase in the number of registered investment projects compared to 2020, demonstrating the effectiveness of those reforms.

The dramatic increase in investment applications in Tanzania can be attributed to several key factors, all of which have been effectively orchestrated by the TIC to create a more conducive environment for investors.

Streamlined investment process

To date, TIC has significantly simplified the investment process by introducing a one-stop centre that brings together various government services under one roof.

Previously, investors had to navigate a complex and time-consuming process involving multiple government agencies to secure the necessary permits, licenses and approvals.

The one-stop center, however, consolidates these services, enabling investors to complete the entire process in a much shorter time.

The streamlined approach has reduced the average time required to process investment applications from several months to just a few weeks.

The efficiency gained through this system has made Tanzania more attractive to investors, as they can now start their projects more quickly, reducing the overall cost and uncertainty associated with delays.

Proactive investment promotion

TIC has been proactive in promoting Tanzania as a prime investment destination through international road shows, conferences and bilateral meetings. These efforts have raised awareness about the opportunities available in Tanzania, particularly in sectors such as manufacturing, agriculture, tourism and renewable energy.

TIC’s marketing campaigns have been tailored to target specific investor groups, highlighting the country’s strategic location, natural resources and growing consumer market.

However, TIC has actively engaged with potential investors and provided them with detailed information about Tanzania’s investment opportunities.

TIC has attracted a broader range of investors from different parts of the world a situation that contributed to the diversification of investments and an increase in the overall number of applications.

Incentives and policy reforms

To further entice investors, TIC has advocated for and implemented several incentives, including tax holidays, duty exemptions and favourable land acquisition terms.

Additionally, the government, influenced by TIC’s recommendations, has introduced policy reforms aimed at improving the ease of doing business in Tanzania.

Those reforms according to TIC include reducing bureaucratic red tape, enhancing property rights and improving access to finance for investors and for effectiveness, those incentives and policy reforms have lowered the barriers to entry for investors, making it easier and more profitable to invest in Tanzania.

As a result, more investors are applying to start businesses, leading to the observed increase in investment application

Improved investor services

TIC has also enhanced its services by offering tailored support to investors throughout the investment process. This includes providing market intelligence, assisting with land identification, facilitating meetings with local partners and offering aftercare services to ensure that investments are smoothly implemented and maintained.

These improved services, according to TIC, have made the investment process more investor-friendly and have built trust between investors and the Tanzanian government.

When investors feel supported and confident that their investments will be protected and nurtured, they are more likely to proceed with their applications.

Political and economic stability

Tanzania has enjoyed relative political and economic stability in recent years, which is crucial for attracting investment. TIC has capitalised on this stability by promoting Tanzania as a safe and stable environment for long-term investments.

Additionally, the government’s commitment to infrastructure development and economic reforms has further strengthened investor confidence.

Stability is a key factor that investors consider when choosing where to invest. Tanzania’s stable environment, coupled with TIC’s efforts to market this stability, has contributed to the surge in investment applications

Investment growth and economic Impact

Tanzania has seen a consistent rise in foreign direct investment (FDI) inflows, thanks to TIC’s proactive measures.

According to the World Bank (WB), FDI inflows into Tanzania reached 1.1bn/-USD in 2022 up from 922m/- USD in 2020.

This growth is partly attributed to TIC’s efforts to promote Tanzania as a stable and lucrative investment destination.

The sectors according to the WB, have benefited the most include manufacturing, tourism and agriculture, which are critical to Tanzania’s economic development.

For instance, the manufacturing sector attracted 40 per cent of total FDI in 2022, leading to the establishment of new industries and the expansion of existing ones.

This sector alone has created over 50,000 direct jobs and contributed significantly to the country’s GDP growth.

Enhancing investor confidence

TIC has also played a key role in improving investor confidence by advocating for a favourable business environment. Through regular engagement with stakeholders and the government, TIC has been instrumental in pushing for policy reforms that favor investors.

Those reforms include tax incentives, improved land acquisition processes and strengthened intellectual property rights, all of which have made Tanzania a more attractive destination for investment.

According to a survey conducted by TIC in 2023, 85 percent of foreign investors expressed satisfaction with the investment climate in Tanzania, citing transparency, ease of doing business and government support as key factors influencing their decision to invest.

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Driving sustainable development

TIC’s focus on attracting sustainable investments has also had a positive impact on the economy. By promoting green energy projects, TIC has attracted investments worth over 300m/- USD in renewable energy projects between 2020 and 2023.

Those projects are not only helping Tanzania transition to a greener economy but also creating jobs and ensuring long-term economic stability.

The TIC has undoubtedly played a crucial role in enhancing the flow of investors into the country, which has, in turn, contributed to the overall growth of the investment economy.

Through strategic reforms, efficient service delivery and a focus on sustainable investments, TIC has positioned Tanzania as a key player in the regional and global investment landscape.

As TIC continues to build on these successes, the future looks promising for Tanzania’s investment climate and economic development.