Tanzania has experienced a significant increase in investment, with a growth of 52.4% in the first quarter of 2023 compared to the same period last year, thanks to an improved economic climate. According to the Tanzania Investment Centre (TIC), the country has garnered $1.2 billion (approximately Sh2.8 trillion) in investment through 93 projects filed with the TIC from January to March, compared to $787.4 million (Sh1.8 trillion) in 2022. These projects are expected to create over 16,400 employment opportunities.
The TIC report, which was made available to the media, revealed that domestic sources accounted for $887 million, or 76% of the total approved investments, while foreign donors contributed $276 million, or 24% of the total.
The construction/commercial buildings sector was a key driver of the positive investment growth, with a significant investment of $333.2 million. Gilead Teri, the executive director of TIC, credited this success to the government’s efforts in creating a favorable business climate. He also highlighted Tanzania’s recent return to international arbitration as a milestone in the country’s reform path, aimed at solidifying its position as a top investment destination in Africa, following modifications to the Tanzania Arbitration Act (R.E. 2020).
Several indicators have remained stable, with the transport and logistics index showing improvement due to mega-infrastructure projects. Tanzania also boasts the lowest cost of power in the region, with $8.45KwH (medium voltage) and $6.65KwH (high voltage), compared to its counterparts in Eastern and Central Africa. Additionally, Tanzania’s talent pool is growing, and its World Bank Public Sector Digital Transformation Index is the highest in the region, according to Mr. Teri.
In March 2023, Tanzania is expected to see a 135% rise in investment in TIC-registered projects compared to February, with capital scheduled to be invested jumping from $339 million in February to $796 million in March, as reported by TIC. However, the number of registered projects dropped by 9.8% during the same period, with 37 projects registered in March compared to 41 in February. Of the total projects, 50% were held by local investors, 31% by foreigners, and 19% as joint ventures.
The transportation industry emerged as the leading participant, with $393.96 million in authorized investments, marking a 349% increase compared to the previous year. Commercial construction and manufacturing followed in second and third place, generating $318.21 million and $52.04 million in investments, respectively. The majority of projects filed in March 2023 were new, accounting for approximately 89% of the overall registration, with expansion/rehabilitation projects making up the remaining 11%.
These projects are estimated to create 7,714 new job opportunities in Tanzania. China, the United States, Mauritius, Spain, and India were the top five leading sources of foreign direct investment (FDI) in March 2023, according to the data.
Tanzania’s impressive investment growth in the first quarter of 2023 reflects the country’s commitment to creating a favorable business environment, implementing reforms, and attracting both domestic and foreign investments. With the continued support from the government and ongoing mega-infrastructure projects, Tanzania is poised to solidify its position as a top investment destination in Africa.