Earnings for companies operating in EPZs surge
Dar es Salaam. Earnings for companies operating in the Export Processing Zones have risen amid increasing investment.
The earnings increased by 12.6 per cent during the year ending July 2017 from the previous year, BusinessWeek has learnt.
Export Processing Zones Authority (EPZA) director for investment, promotion and facilitation Mr James Maziku said the earnings jumped to $1.34 billion (about Sh3.02 trillion at the prevailing exchange rate), up from the previous year’s $1.19 billion (Sh2.68 trillion).
EPZA has licensed 160 companies to operate at EPZA since the authority was launched, with more than 120 of them being operational.
Forty five per cent of those companies are local, 43 per cent foreign and 12 per cent joint ventures, according to Mr Maziku.
According to him, investors are confident about markets in the East African Community, Southern African Development Community and the African Growth and Opportunity Act.
A new report ranked Tanzania as among highly attractive investment destinations in 2017.
That was attributed to an anti-corruption campaign, which raised the country’s status two places last year to number seven, compared with its record in the previous two years, according to Rand Merchant Bank.
As of July last year, companies operating under EPZA invested a total of $1.73 billion (Sh3.9 trillion), up from $1.46 billion recorded in 2016.
The factories had created 52,395 job opportunities by last July compared with 37,730 registered in 2016.
Agro-processing accounted for 39 per cent of the investments, assembly (31 per cent) engineering (21) and textiles (9).
EPZA is responsible for steering and implementing government policy on promotion of Economic Zones which are in two schemes namely Export Processing Zones (EPZs) and Special Economic Zones (SEZs) in Tanzania.
EPZA investment promotion manager Grace Lemunge said 22,0000 hectares had been aside in Bagamoyo for a special economic zone. Last week EPZA also declared 110 hectares as a free port zone in Mtwara and earmarked 2,600 hectares for developing a special economic zone.
EPZA has earmarked 700 hectares for developing a trade and industrial hub in Kigoma.
The aim is to capture cross-border trade. Incentives to be give to investors, according to Ms Lemunge, include exemption of VAT and withholding tax for 10 years.
Investors will also be exempted from import duty of raw materials.
“This is meant to cut operational costs to make investors operating under EPZA competitive enough to compete globally,” she explained.
For the company to be under EPZA, it must have a start-up capital of at least $100,000 (about Sh226 million) for Tanzanians and $500,000 (Sh1.13 billion) for foreigners.
According to EPZA public relations head Nyanda Shuli, agriculture, agri-business, infrastructure, mining and fishing are priority areas on investing.
