Tanzania’s Foreign Direct Investment (FDI) witnessed a significant upswing in Q1 2023, reaching an impressive $1.05 billion. This figure, nearly doubling from the same period last year, indicates a notable economic shift.
China emerged as the primary contributor, injecting $614 million into Tanzania’s economy. Singapore, Germany, India, and Mauritius also played substantial roles, contributing $138.9 million, $118.6 million, $42.3 million, and $24.8 million, respectively.
This surge aligns with Tanzania’s ambitious targets of achieving $15 billion in FDI by 2025 and an even more ambitious $30 billion by 2030. The Tanzania Investment Centre attributes this positive trend to a growing confidence in the country’s economic prospects.
FDIs accounted for 51% of the new investments, totaling $1.05 billion, while domestic investments made up the remaining 49%, experiencing a decline from $1.91 billion in 2022 to $1.01 billion in 2023.
In terms of sectoral focus, the real estate sector received the lion’s share of FDIs, securing $480.38 million, closely followed by manufacturing projects at $245.58 million. Conversely, domestic investors favored ventures in agriculture ($420.25 million), economic infrastructure ($212.52 million), and transportation ($178.32 million).
The TIC report indicated a significant drop in total investments in Tanzania’s manufacturing sector, falling from $2.15 billion in Q1 2022 to $356 million in Q1 2023. On a positive note, the tourism sector experienced growth, attracting $40.64 million in new investments compared to $36.34 million in 2022.
Out of the 137 new projects approved by TIC, 49 were fully under foreign ownership, 43 were joint ventures, and 45 were fully owned by local investors. This marks an increase from 38, 14, and 30, respectively, compared to the previous year.
More than half of the new projects found their home in Dar es Salaam and the neighboring coastal region, accumulating a combined value of $985.62 million. In contrast, the administrative capital, Dodoma, attracted a more modest $62.21 million worth of investment.
Tanzania’s economic landscape is undergoing a transformation, fueled by a surge in foreign investments and strategic diversification across key sectors. With a careful balance between FDIs and domestic investments, the nation is positioning itself for a promising economic future.
Photo (worldatlas.com)
By: Montel Kamau
Serrari Financial Analyst
26th November, 2023
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