Tanzania leads EAC investment league

Latest investment report by the United Nations Conference on Trade and Investment (Unctad) ranks Tanzania top in the East African region for exerting a pull on foreign investors.

The World Investment Report was formally launched yesterday at the United Nations Information Centre where Tanzania was declared as the leading East African Community (EAC) country attracting more Foreign Direct investment (FDIs) than the rest.

It says for the period 2006, while Tanzania managed to lure FDIs to the tune of USD 377m, Uganda trailed at USD307m; Burundi attracted USD290m as Kenya raked in only USD51m.

Rwanda came last for getting mere USD 15m worth of FDIs last year.

However, in terms of absolute values, the level of FDIs flows into Tanzania declined by 18 percent, compared to investments realized in 2005, which was USD 448m.

The document which goes by the title `The role of Trans-national Corporations in Extractive Industries` attributes the drop off to declining fresh FDIs to the mining sector.

Yet, the relatively high levels of FDIs were maintained because of increased investments for expanding existing mining projects as opposed to initiation of new projects.

The book-launching ceremony was officiated by the Director of Research and Information Systems at Tanzania Investment Centre (TIC) who said the report had come at the right moment when people from several walks of life were questioning the role of the mining sector in fighting the country`s deepening poverty.

`My personal remark is that while Tanzania is relatively doing well compared to other countries in EAC in terms of FDI attraction, the mining sector is the only leading sector in terms of value of investment�why aren�t other sectors doing as well as mining?` he asked.

He said the report testified that trans-national corporations` participation in extractive industries could have positive impact on host economies.

Kyaruzi said for Tanzania to continue excelling to attract more FDIs, there was urgent need to aggressively promote its major sectors of the economy.

On its part, he said TIC had underlined five major areas whose improvement would trigger FDI inflow in the country.

These include a long-term plan to raise the profile and image of Tanzania as a business location, identify and increase investment flow in key and strategic sectors of the economy, and maximize the impact of new investment on the Tanzania economy by providing good after-care to the existing investors.

Other focus areas earmarked by TIC are emphasis on ensuring existence of continuous competitive business environment and frequent removal of business barriers, as well as developing and promoting sites and infrastructure that meet investors` needs such as Export Processing Zones (EPZs) and Special Economic Zones (SEZs).

The report cited the 10-top most African recipients of FDI as Egypt, Nigeria, Sudan, Tunisia, Morocco, Algeria, Libya, Guinea, Chad and Ghana.