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| 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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