Hope, caution as Tanzania merges investment agencies

Dodoma. Parliament yesterday approved amendment of Tanzania’s investment legislation that merged two entities related to investment facilitation into a single agency.

The Investment and Special Economic Zones Bill, 2024 repealed and replaced the Tanzania Investment Act, 2022, the Export Processing Zones Act, 2002 and the Special Economic Zones Act, 2006 while introducing significant changes to the investment legislation.

The changes include merger of the Tanzania Investment Centre (TIC) and the Export Processing Zones Authority (EPZA) into a single institution to be called the Tanzania Investment and Special Economic Zones Authority.

By consolidating the three laws, the government aims to eliminate redundancies and create a unified legal framework for investment in Tanzania.

The consolidation follows a 2023 performance review of public institutions, which highlighted overlapping roles and inefficiencies among state agencies, resulting in high operating costs for the government.

“TIC and EPZA are some of the public institutions whose roles were found to overlap and be similar, leading to the decision to merge them into a single institution,” the Minister of State in the President’s Office (Planning and Investment), Prof Kitila Mkumbo, said when he presented the Bill before the House.

The proposed authority will act as the government’s main agency for investment coordination and promotion, while advising on policy matters.

To ensure alignment with national priorities, the new law also forms a National Investment Development Committee, tasked with providing strategic direction, approving investment plans, and recommending incentives for strategic investors.

Another key change introduced by the new law is the establishment of a unified electronic system to facilitate investment processes.

The integrated platform will connect all relevant authorities responsible for issuing permits, licences, and approvals, enabling investors to access all necessary services under one roof. “This step will enable investors to access services easily without having to deal with multiple institutions for permits or licences,” Prof Mkumbo said.

To address challenges in accessing suitable land for investment, the proposed law also recommends the creation of a land bank, a centralised database cataloguing government-designated investment land and privately-owned property available for lease.

Under the proposed provisions, the land bank will serve as a database holding information on available land across the country.

MPs urge caution

Some lawmakers who debated the Bill supported the merging of the two institutions, saying it will give Tanzania a competitive edge as far as investment is concerned.

“Creating a single agency will simplify the processing and coordination of investment into Tanzania,” said Ms Mary Masanja (Special Seats-CCM).

However, she cautioned the government on land acquisition and treatment of local investors. She asked the government to ensure fair compensation of land owners and create relaxed conditions for local investors so that they don’t compete with foreigners.

Similar views were also voiced by Parliament’s Public Investment Committee (PIC), which advised that the authority oversee the entire process of transferring privately owned land to investors and the compensation procedure, including conducting land valuation to ensure the owner receives fair compensation.

The committee also asked the government to continue merging its agencies for efficiency.

“It is the committee’s recommendation that the government continue with the process of merging its organisations to enhance efficiency and productivity while reducing the burden on the government,” said committee chairperson Augustine Vuma.

Mr Charles Kajege (Mwibara-CCM) also supported the motion but highlighted things that need to be done to attract more investors into Tanzania.

“The new agency staff need to learn from other countries so that they become proactive,” said Mr Kajege, adding that the bureaucrats should also shorten time for processing permits and licences.

However, responding to the cautions and other comments from the lawmakers, Prof Mkumbo allayed the fears.

“The government has taken note of the concerns from both the MPs and the committee and assure that we will work on that,” he said.