Factors Affecting Fdi Inflow in Tanzania

Topics: Investment, Macroeconomics, Foreign direct investment Pages: 28 (6184 words) Published: April 28, 2010



Tanzania Investment Centre (TIC) is the primary agency of the Government of Tanzania to coordinate, encourage, promote and facilitate investment in Tanzania and to advise the Government on investment related matters.

TIC is a focal point for investors. It is the first point of call for the potential investors; it is a “one stop facilitative centre for all investors”, engaging in the business of marketing Tanzania as an investment destination. TIC was established in 1997 by the Tanzania Investment Act No.26 of 1997 to be “the primary agency of Government to coordinate, encourage, promote and facilitate investment in Tanzania and to advise the Government in Investment related matters” All Government departments and agencies are required by law to cooperate fully with TIC in facilitating investors.

As a primary agency of the Government in all investment matters, TIC is charged with the following functions:-

• Assist in establishment of enterprises e.g. incorporation of enterprises; • Obtain necessary licenses, work permits, visas, approvals, facilities or services; • Sort out any administrative barriers confronting both local and foreign investments; • Promote both foreign and local investment activities; • Secure investment sites and assist investors to establish EPZ projects; • Grant Certificates of Incentives, investment guarantees and register technology agreements for all investments, which a re over and above US $ 300,000 and 100,000 for foreign and local investment respectively; • Provide and disseminate up to date information on existing investment opportunities, benefits or incentives available to investors; and • Assist all investors whether or not registered by TIC.

TIC headquarters is in Dar es Salaam, but has established Zonal offices in Kilimanjaro, Mwanza and Mbeya regions in order to assist Investors who are based in nearby regions to access TIC services without necessarily traveling to Dar es Salaam. The Zonal offices are responsible in assisting investors to obtain all relevant permits, approvals and licenses they require in order to set up their businesses.

In order to strengthen and expedite facilitation services, ten (10) Senior Officers from Government or its Executive Agencies have been permanently stationed at TIC to serve investors under one roof. Presently these officers include those from:-

• Ministry of Land, Housing and Human Settlement Development; • Tanzania Revenue Authority (TRA);
• Immigration Department;
• Ministry of Labor, Employment and Youth Development (Labor Department); • Ministry of Industry, Trade and Marketing (Directorate Trade); • Business Registration & Licensing Agency (BRELA). 


FDI has been one of the principal beneficiaries of the liberalization of capital flows over recent decades and now constitutes the major form of capital inflow for many African countries, including some low-income ones like Tanzania. Economies are often considered less vulnerable to external financing difficulties when current account deficits are financed largely by FDI inflows, rather than debt-creating capital flows. There is no denying the importance of FDI inflows both for their contribution to sustaining current account imbalances in countries and for their contribution to broader economic growth, through technological spillovers and competition effects. Recent economic reports show that Tanzania lags behind neighbors Kenya, Democratic Republic of Congo, Zambia and also Madagascar in its ability to attract foreign investors. A ccording to a top economic official, the failure to execute pro-business reforms is keeping prospective foreign investors away from Tanzania. (Konye Obaji Ori, Afrik.com, Thursday September, 2008). The Chief Executive Officer of the Tanzania Investment Centre, Mr Emmanuel...
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