Harris Kamala’ visit rings true in a call for Tanzania to flourish

By Nelson Mwita

Tanzania was gripped by excitement and expectations last week during US Vice President Kamala Harris’s visit. Madam Vice President arrived at Nyerere International Airport and received a warm welcome by her counterpart Vice President Dr Philip Mpango. Together with her husband, Harris received a bouquet of flowers from a young girl and proceeded to greet the dignitaries aligned on the red carpet. On her way from the airport, the US vice president was greeted with ubiquitous posters conveying the message, ‘Karibu Tanzania, the land of Mt. Kilimanjaro’ conveying the message that Tanzania is open for relations and investments.

During her visit Harris witnessed the signing of a new memorandum of understanding between the Export-Import Bank of the United States (EXIM) and the Government of Tanzania. The MoU could facilitate up to $500 million in financing to help U.S. companies export goods and services to Tanzania in sectors including infrastructure, transportation, digital technology, climate and energy security and power generation. Additionally, Harris mentioned a new partnership in 5G technology and cybersecurity, as well as a US-supported plan by Life Zone Metals to open a new processing plant in Tanzania for minerals that will go into electric vehicle batteries. Notably the US intends to provide $560 million in assistance to Tanzania in the 2023/2024 financial year.

Kamala Harris’ visit brought a boost to Tanzania’s confidence and image. Our country maintains its strong international ties and a welcome commitment to doing business which is mutually beneficial for partnering nations and investors. The Ministry of Industry and Trade, TIC and business community state it a lot and its true – with our vibrant culture, natural beauty and resources, and investments possibilities – Tanzania has the potential to be the land and destination of long-term investments and golden profit margins.

Looking at the statistics, Tanzania is now one of the most preferred destinations for foreign investment in Africa.

According to UNCTAD’s 2022 World Investment Report, Foreign Direct Investments (FDI) inflows to Tanzania reached $922 million in 2021 up from the previous year ($685 million). In the same period, the total stock of FDI stood at $17.1 billion, translating to 24.4 percent of the country’s GDP. This country is a popular choice for FDI. In its Africa’s Macroeconomic Performance and Outlook (January 2023), the African Development Bank (AfDB) estimated that the GDP of Tanzania will grow by +5.1 percent this 2023 and by +6.1 percent in 2024. Our main sectors for investment continue to be tourism, mining, construction, agriculture, and manufacturing.

Looking at the tenets of a potential investors return on investment – the cost of doing business is relatively low, and there’s a continued effort to create a more friendly and conducive business environment in Tanzania.

Raw materials can be extracted and found at an affordable cost and the country can be used as springboard for other markets in Africa, particularly given our EAC and SADC membership.

Tanzanian labour costs and rate of inflation are considerably lower than many countries in the region and our power and transportation costs are amongst the lowest in Africa. The carrot Tanzania is using to entice investors is large with reasonable guarantee of political stability.

Tanzania is an emerging market with a rapidly growing economy. The state is constantly making political, structural, and economic reforms to drive sustained economic growth.

Additionally, the Government recently shifted its position with respect to foreign investment and developed an Investment Act focused on improving the ease of entering and conducting business in Tanzania. Under the new Act, the Government has given more mandate to Tanzania Investment Centre to coordinate, promote and facilitate investments in Tanzania.

Harris’ visit underscores the global belief that indeed Tanzania is ripe for business and embracing the spirit of entrepreneurship that will spark prosperity to improve lives and communities.

Equally, Mama Samia’s pro-business approach is sending positive and reinforcing messages to investors – come and let us do business now. Yet again, the US VPs visit should remind us of the need to continue strengthening the Small and Medium-sized Entrepreneurs (SMEs), as a strong and diverse collection of formal companies in our economy are essential for economic development. SMEs will be the businesses that foreign investors will be looking to invest in, acquire, partner with, or use as a supplier in their business activities in Tanzania.

As a country, we need to focus on establishing and supporting a pipeline of sustainable investment opportunities and businesses for investors.

We also need to go fast in ensuring that youths have jobs and access to economic opportunities; we need to continue to act quickly in the race against poverty as a nation. Our young people need investment to succeed in more demanding and skilled roles as our economy grows. Investing in Tanzanian youth is an investment in our collective future.

As Harris flies back to US, her visit reminds us that there are lots of opportunities for investment – both domestic and foreign – when it’s promoted by the Government. It serves as a reminder to our young generation of workers that are coming into the workforce to prepare themselves to take advantage of the opportunities this will lead to in coming years in sectors that are a growing focus on investment. Embracing the spirit of “Hapa Kazi Tu” and “Kazi Iendelee” – a true call for Tanzania to flourish. We must wake up early to work and build skills, we must continue innovating, we must keep thinking positive and knowing that tomorrow will be better than today.