Investment via EPZA drops by 88pc in five years: CAG

Dar es Salaam. The value of new investment capital in the Export Processing Zones Authority (EPZA) decreased by 88 percent during the past five years.

The report of the Controller and Auditor General (CAG) for the 2019/20 financial year revealed that investors injected a total investment capital of $500 million in 2015/16 compared to the paltry $59.86 million invested in the 2019/20 financial year.

The EPZA responded to this by saying that the decline in investments value was contributed to by - among other things - challenges in the processes of accessing the requisite investment permits for investors from other government institutions.

“The institutions include the National Environment Management Council (Nemc), the Lands ministry, Employment Authority, Immigration Department and the Tanzania Revenue Authority (TRA),” the report reads in part.

EPZA officers also told the CAG that the decline was attributed to the prohibition of investors from selling more than 20 percent in markets of the East African Community (EAC) member states.

The CAG says in his report that in the financial year 2019/20, the number of new projects was only five projects with a total capital of $59.86 million compared to 11 projects with a capital of $180.06 million registered in 2018/19.

“I noticed that EPZA was not timely issuing Investment Licences in the Special Investment Zones. For example, only five licences equivalent to 26 percent of the 14 licences applied for in the 2019/20 financial year were issued,” the CAG noted in the report.

The total value by the 14 investors, the CAG said, stood at $590.94 million.

However, EPZA’s Investment Promotion and Facilitation director James Maziku told The Citizen that the major causes for the decline of the new investment volume and value were the new Common Market Agreements within EAC countries and the impact of the Covid-19 pandemic.

“The EAC common market protocol defines the markets of the member states as domestic ones instead of export destinations. This led to the majority of investors losing appetite for investing through EPZA,” he said.

He added: “The Covid-19 pandemic was also a major contributor causing investors not to put their money in our EPZA because most of the export destination countries experienced a partial or total lockdown.”

Mr Maziku, however, said that the EPZA has already issued 14 investment licences to investors in the 2020/21 financial year.

“I agree that our new capitals fell during the period due to the above challenges, but our accumulative investment capital, export value and employment trends are encouraging,” he told The Citizen over the phone.

Following good facilitation of the existing investors, Mr Maziku said, the accumulative investment capital rose up from $1.4 billion in 2016 to $2.5 billion in 2020.

The EPZA also recorded the export value of $2.3 billion and provided a total of 57,500 jobs to Tanzanians in 2020.