Dar set to revamp policy to attract more investments

Eng Mbilinyi
Tanzania is in the process of revamping its economic policies including the investment policy, a senior official announced over the weekend.

"Policy matters affect the flow of investments into the country," said Tanzania Investment Centre (TIC) Acting Executive Director, Engineer Raymond Mbilinyi.

Eng Mbilinyi was speaking at the launching of the World Investment Report 2012 in Dar es Salaam last Friday, where he said in many countries the contribution of investments to the economy was low.

He said the main objective of overhauling of the policies was to make investments sustainable and inclusive.
"At the moment consultants have started to work on policy revamping and will include all key stakeholders," Eng Mbilinyi said, adding that the document will be sent to Prime Minister's Office (PMO)  for further consultations.

He said: "In that vein its difficult for me to say when the policy will be ready... but we want it as soon as possible."  The TIC chief said in Tanzania the investment policy excludes the middle class and Small and Medium Enterprises (SMEs) which as a consequence fail to tap business opportunities from multinational corporations.

Mr Mbilinyi was reacting to questions to representatives of the United Nations Conference on Trade and Development (UNCTAD), United Nations Development Programme (UNDP) and TIC at the launching of WIR 2012, last Friday.

The WIR 2012 for the first time introduced FDI contribution index which shows that in some countries investments contribution to development is actually less than the expectations.

The index ranked economies by the significance of the FDI and foreign affiliates in the overall economy, in terms of value added, employment and wage generation, tax revenues, exports and capital formation.

"To asses the impact of the FDI, countries have to gauge themselves in investment matrix," Mr Mbilinyi, who launched the report with UN Resident Coordinator, Mr Alberic Kacou, said.

"The idea of policy formulation is to try to link the SMEs with multinationals...that linkage is still not there, (but) TIC has already established a unit for this purpose," Mr Mbilinyi said.

The report shows that national investment policies continued to be favourable to foreign investors. "Policy measures were targeted at specific industries, in particular in certain services such as electricity, gas and water supply, transport and communication," the report indicates.

Although the report is silent on direct correlation between incentives and attraction of investments, it shows that through the new FDIs the contribution of foreign affiliates to host economies is relatively higher in developing nations, especially Africa.

"This is in terms of value added, employment, tax revenue, export generation and capital formation," the WIF 2012 indicates.

The former TIC Executive Director Emmanuel  Ole Naiko said incentives are important as some four years ago when they were removed, FDIs dropped significantly and rose again after they were reintroduced.

"Incentives are not bad, what is needed is proper execution and not abusing them," Mr Ole Naiko said, during the launching of the report.

TIC report on assessment of incentives on the economy shows that investors are paying 95 out of total tax dues compared to only five per cent given as tax exemption. This is contrary to the notion that incentives are ruining the economy.
Source:  The Daily News,http://www.dailynews.co.tz, reported by Abduel Elinaza
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