Zanzibar pledges tax incentives to attract investors

Unguja. Zanzibar President Dr Hussein Mwinyi has assured local and foreign investors that his government will continue fostering a favourable investment climate by offering tax incentives and cutting bureaucratic red tape.

Dr Mwinyi made the remarks on Tuesday, January 20, 2026, during the inauguration of a new Azam Company vessel, Kilimanjaro IX.

He said sweeping reforms to investment policies, laws, and guidelines have opened up opportunities for the private sector to participate fully in competitive business activities.

“I want to assure local and foreign investors that the government will continue creating a conducive investment environment through tax incentives and the removal of bureaucracy,” he said.

“Today, we are witnessing major transformations across various sectors, including maritime transport, where local companies are leading in delivering quality marine services,” added Dr Mwinyi.

He said the maritime transport sector is critical to national economic development, noting that more than 90 percent of goods entering and leaving the country are transported by sea.

As a result, he said, the government will continue strengthening the sector by upgrading all ports in Unguja and Pemba, developing new modern ports to improve transport services nationwide, and easing congestion at existing facilities.

He said that, in partnership with the private sector, the government is currently constructing Mpigaduri Port, which will serve as a passenger terminal, cargo facility, and tourism marina.

The President said construction is also underway at the Mangapwani integrated port, which will handle cargo and container vessels, receive oil and gas ships, and offer dry-docking services for the maintenance of large vessels.

Furthermore, Dr Mwinyi said his government is continuing with the construction of Fumba Port and other facilities to meet growing demand.

“I hope these initiatives will significantly spur economic growth by improving efficiency in passenger and cargo transport services across the country,” he said.

President Mwinyi added that the government will continue working closely with investors providing maritime transport services so that Zanzibaris can access high-quality and affordable transport.

He used the occasion to urge the private sector to seize existing opportunities, noting that Zanzibar has become more open to investment and trade, and encouraged investors to commit their capital to the islands.

The president also commended the Bakhresa Group for its continued efforts to improve maritime transport services, while calling on other local entrepreneurs to emulate the example by demonstrating patriotism and contributing to national economic growth.

According to Dr Mwinyi, information available to him shows that the company has so far invested about $150 million, equivalent to Sh300 billion, in the maritime transport sector, creating more than 281 jobs for Tanzanians.

This includes the acquisition of passenger and cargo vessels operating between Unguja, Pemba, mainland Tanzania, and the Comoros Islands.

Presenting a technical briefing on the investment climate in Zanzibar, Zanzibar Investment Promotion Authority (Zipa) Director General Saleh Saad Mohamed said the authority, through investment policy reforms, has continued to attract and oversee major investments in the islands.

He said that over the past five years, a total of 588 projects worth $6.8 billion, equivalent to Sh17.187 trillion, have been implemented, with the potential to create 28,000 jobs.

He added that the vessel project alone cost $12.9 million, equivalent to Sh32.624 billion.

Azam Marine Manager Abubakar Aziz Salum said that over the past three years, the company has invested more than Sh89.7 billion.

“In 2025, it paid Sh17.5 billion in taxes to the government, an 18 percent increase compared with the Sh14.9 billion paid in 2023,” he said.

Mr Salum said the investments were driven by Zanzibar’s favourable investment policies, noting that over 15 years, from 2010 to 2025, the company invested capital amounting to Sh300 billion.

According to him, the company owns 27 vessels, but only 10 are currently operational, with the rest having reached the end of their service life due to harsh marine conditions.

However, he said ship owners face environmental challenges caused by river currents that discharge wastewater into the area, a situation that significantly damages vessels and necessitates frequent repainting.

“We appeal to service providers to work with government institutions to protect and conserve the marine environment so that we can continue offering quality services over the long term,” he said.

The private sector has increasingly capitalised on opportunities in maritime transport, given that for nearly a decade the Revolutionary Government of Zanzibar has not owned cargo or passenger vessels, with such services provided exclusively by private operators.