Tanzania to launch fund to facilitate overseas investments

Arusha. Tanzania is finally pondering the idea of empowering local parastatals to transcend borders and invest in neighbouring countries as well as overseas.

President Samia Suluhu Hassan will be leading a roundtable discussion with heads of public institutions, companies and organisations in Arusha today to come up with strategies of expanding the country’s economic ventures beyond borders.

Speaking yesterday, Treasury Registrar Nehemiah Mchechu announced that Tanzania is working to establish a dedicated investment fund aimed at providing government-owned companies with the necessary capital for international investments.

According to Mr Mchechu, the government has invested over Sh76 trillion into 248 corporation and other state agencies.

As such, he said, there was a need to give them wings for raking in profits not only from internal ventures but also internationally.

President Hassan, Mr Mchechu said, will lead the dialogue, which aims at ensuring Tanzania takes the economic helm in Eastern Africa and later Sub-Saharan Africa as well as globally.

He pointed out that all foreign firms investing in Tanzania are usually owned by governments of their countries of origin and therefore Dar needs to do the same when forging new economic grounds overseas.

Data from the Tanzania Investment Centre (TIC) show that the top five leading sources of Foreign Direct Investment (FDI) to Tanzania are China, the United States, Mauritius, Spain and India.

FDI to Tanzania was drawn mostly to commercial buildings, manufacturing and transportation sectors.

“But while we are working to empower government corporations to start investing abroad, the government is hatching new initiatives to give a push to other parastatals in the country in realising profits as well as paying dividends, as many of them were still operating on losses,” stated Mchechu.

This new investment drive will be realised in a period of three years.

“And we are seeing improvements because the numbers of parastatals that issue dividends have increased from 109 to 145 institutions,” said the Treasury Registrar, because his department targets to support between 30 and 40 parastatals annually so that they may also become profitable.

Mchechu said each public institution must have recurrent surveys and reviews of performance after every three years.

So far the only Tanzanian company—which is partly owned by the government—that has been venturing out for investments is the CRDB Group, a banking entity that is already operating in Burundi and the Democratic Republic of the Congo and which envisages to expand to Zambia and Uganda in the near future.