Tanzania increased investment by 52.4% in the first quarter of 2023 compared to the same period last year, owing to an improvement in the economic climate.
Tanzania garnered $1.2 billion (approximately Sh2.8 trillion) in investment through projects filed with the Tanzania Investment Centre (TIC) from January to March, compared to $787.4 million (Sh1.8 trillion) in 2022.
According to the most recent TIC report, made available to the media yesterday, the investment will be made in 93 projects that would create more than 16,400 employment possibilities.
Domestic sources provided $887 million, 76% of the total approved investments. Foreign donors gave $276 million, or 24% of the total.
Positive investment growth was primarily driven by the strong performance of the construction/commercial buildings sector, which soared with a $333. 2 million investment. TIC executive director Gilead Teri credited the strong success to the government's continued efforts to create a favorable business climate.
He stated that Tanzania's return to international arbitration as a result of modifications to the Tanzania Arbitration Act (R.E. 2020) is another key milestone in the country's reform path aimed at solidifying its position as a top investment destination on the continent.
Some indicators have stayed stable; the transport and logistics index is improving as a result of current mega-infrastructure projects.
According to Mr. Teri, the cost of power is the lowest in the area, at $8.45KwH (medium voltage) and $6.65KwH (high voltage), compared to all regional counterparts in Eastern and Central Africa.
“Our talent pool is growing and our World Bank Public Sector Digital Transformation Index is the highest in the region,” said Mr. Teri in the TIC Monthly Investment Bulletin (March). He also added, “reforms are happening and the impact is reflecting on our monthly numbers.”
Tanzania is expected to see a 135% rise in investment in TIC-registered projects in March this year compared to February. The capital scheduled to be invested jumped from $339 million in February to $796 million in March, according to TIC. Notwithstanding the fact that the trend shows a 9.8% drop in the number of registered projects throughout the study period.
In March 2023, 37 projects were registered, compared to 41 projects filed in February 2023. Also in the same month, 50% of total projects were held by local investors, 31% by foreigners, and 19% are joint ventures.
The Transportation industry emerged as the leading participant, with $393.96 million in authorized investments, a 349% increase over the same time the previous year.
Commercial construction and manufacturing finished in second and third place, generating $318.21 million and $52.04 million in investment, respectively. The bulk of projects filed in March 2023 was new, accounting for around 89% of the overall registration, with expansion/rehabilitation projects accounting for approximately 11%.
According to the data, the projects filed last month are estimated to create 7,714 new work opportunities in the country. China, the United States, Mauritius, Spain, and India are the top five leading sources of FDI in March 2023.