John Green 4 December 2018.
Newly appointed Minister for Industry, Trade and Investment, Mr Joseph Kakunda has stressed on the need for Tanzania’s government to support the local sector, whose contribution to the country’s economy has proven to be vital.
Local firms have faced stiff competition from foreign businesses seeking investment opportunities in the country.
According to a report released by Financial Times mid this year, East Africa accounted for the most FDI inflows in Africa, with Kenya targeted as a preferred investment hub, despite facing competition from Ethiopia, Africa’s fastest growing economy. The emergence of the oil and gas industry as an exciting investment sector has pulled foreign companies in search of business opportunities.
The stewardship of President John Magufuli in the fifth phase government has seen emphasis put on the need for more FDI inflows in the economy, posing a challenge to the rise of the local sector. The government has however vowed to support the growth of local industries and give them space to contribute to the nation’s GDP and offer employment opportunities to the citizens.
The minister reiterated the need to cooperate with local industries to drive President Magufuli’s industrialisation drive of becoming a middle-income economy by 2025.
While visiting the Executive Chairman of the IPP Media Dr Reginald Mengi, he commended the businessman for his efforts to invest in the local manufacturing country to steer economic development. Mr Mengi signed a deal with a South Korean firm to establish a USD 10 million assembling plant in Dar es Salaam. The facility will employ over 1,000 people, expanding its services across the East African region.
In 2013, two years before the election of Magufuli into presidential shoes, Tanzania recorded the highest FDI within the East African Community (EAC), according to a report released by the United Nations Conference on Trade and Development (UNCTAD), which stood at USD 1.872 billion.
In 2016, the 16th edition of the African Economic Outlook report published ranked Tanzania ninth in Africa following the government’s strategy to welcome more foreign investments. The nation remains to be a potential investment hub especially in the oil and gas industry and agriculture, the country’s economic mainstay.
As the government creates a conducive and competitive business environment, the local sector cannot be left out to seize the various opportunities to build a sustainable economy through investment incentives such as tax credits across the priority sectors.
Tanzania’s Ministry of Foreign Affairs published the Business Sector Programme Support Phase IV 2013-2019 document whose objective is to “Improved employment and income opportunities for farmers and micro small and medium enterprises (MSMEs) through green inclusive growth.” The three components of BSPS IV are designed to address some of the major factors that contribute to unleashing private sector growth.