Foreign Direct Investment (FDI) figures in Tanzania went up almost twofold year-on-year to $1.05 billion between July and September against $524.4 million in the same period last year.
China was the leading source of FDIs, pumping in $614 million in new investment capital during the period under review, with Singapore ($138.9 million), Germany ($118.6 million), India ($42.3 million) and Mauritius ($24.8 million) also named as major sources.
The Q1 2023 figures disclosed by the state-run Tanzania Investment Centre in its quarterly bulletin published last week, were a boon to Tanzania’s ambitions to increase FDI inflows to $15 billion by 2025 and $30 billion by 2030, which would be a significant improvement from $2 billion in 2021.
Read: East Africa weathers storm to record growth in FDI
The TIC report described the surge in FDIs since July as “indicative of increased confidence in Tanzania’s economic prospects and potential for investment.”
But according to the report, the FDIs boost was offset by a parallel sharp dip in local-sourced investments that caused an overall 14 percent drop in new investment capital from $2.41 billion to $2.06 billion during the period under review.
FDIs accounted for 51 percent of the new investments against 49 percent for domestic investments which registered a first-quarter turnover decline from $1.91 billion in 2022 to $1.01 billion this year.
Almost half ($480.38 million) of the new FDIs went into real estate sector and another $245.58 million was directed to manufacturing projects. By contrast, domestic investors showed more interest in ventures related to agriculture ($420.25 million), economic infrastructure ($212.52 million) and transportation ($178.32 million).
According to the TIC report, total investments in Tanzania’s manufacturing sector dropped sharply from $2.15 billion in Q1 2022 to $356 million in Q1 2023 while the tourism sector recorded new investments worth $40.64 million compared to $36.34 million in 2022.
Read: FDIs in East Africa declined in 2019 – report
Of the 137 new foreign and domestic investment projects approved by TIC during Q1 2023, 49 were fully under foreign ownership, 43 were joint ventures between local and foreign investors, and 45 fully owned by local investors up from 38, 14 and 30 respectively last year.)
More than half of the new projects were concentrated in the commercial seaport capital Dar es Salaam and neighbouring coastal region with a combined value of $985.62 million.
On the other hand, the administrative capital Dodoma in central Tanzania drew just $62.21 million worth of investment in new projects.
