The value of new investments dropped by 44.4 per cent last year, but the number of ventures funded by locals increased sharply, according to a new report.
The National Bureau of Statistics (NBS) says in its report on the national economy for 2018 that the value of new projects registered by the Tanzania Investment Centre (TIC) fell to $2.82 billion in 2018 from $5.07 billion in 2017.
It adds that the drop was largely due to removal of financial incentives on expansion projects and non-capital goods. The Citizen tried unsuccessfully for four days to get more details from TIC.
Mr Geoffrey Mwambe, the executive director of TIC, which furnishes NBS with investment data, said he needed to read the report first before commenting.
“I’m currently away on official duty in Lindi and Mtwara. I have not yet read the report. I will be in a position to comment after returning to Dar es Salaam and reading the report,” he told The Citizen by SMS.
The NBS report indicates that the number of TIC-registered projects went down by 37.7 per cent.
“In 2018, TIC registered a total of 215 projects, compared to 345 in 2017. The drop was a result of removal of financial incentives on expansion projects and non-capital goods…new projects in 2018 created a total of 27,469 jobs compared to 30,728 that were created in 2017.”
In a move to curb abuse of tax exemptions, the government changed its system of granting tax exemptions during the 2016/17 financial year.
Under the new system, businesspeople, public servants, religious institutions and non-governmental organisations are required to pay tax on goods ordered in advance and the money is supposed to refunded to beneficiaries after confirmation that the goods have been used for the intended purpose.
The report indicates a major drop in new foreign-owned projects from 168 in 2017 to 69 in 2018.
On the other hand, there was a rise in projects implemented by Tanzanians to 132 in 2018 from 84 the previous year.
The business services sector commanded the highest value of registered projects last year, with NBS figures showing that TIC registered a total of 16 projects worth $1.017 billion.
The manufacturing sector came second, with a total of $639.18 million injected into 108 projects.
Agriculture came third after investors injected a total of $506.87 million into 12 agricultural based projects.
The construction and transport sectors came fourth and fifth, respectively. TIC registered a total of 26 projects in the commercial buildings construction category worth a total of $244.55 million, while 16 new transport-related projects were valued at $166.39 million.
Dar es Salaam maintained its position as Tanzania’s economic giant in 2018 by registering a total of 109 projects.
“This was due the presence of an enabling environment for investment, namely better infrastructure compared to other regions,” NBS says.
Coast Region, which borders Dar es Salaam, came second, registering 37 projects in 2018. Arusha had nine, while Kilimanjaro and Morogoro had eight projects each. Mwanza registered seven projects, while Katavi, Kigoma, Lindi, Rukwa, Ruvuma and Simiyu had no new project last year.
Analysts say further improvement in the business environment would help the country.
“Investors want return on their money. Unpredictable policies and laws reduce appetite,” said an economist from the University of Dar es Salaam, Dr Abel Kinyondo.
By Gadiosa Lamtey
Source: thecitizen.co.tz
