Dar es Salaam. Vice President Philip Mpango on Thursday officiated the Tanzania-European Union Business Forum at the Julius Nyerere International Convention Centre (JNICC), where he assured EU investors of Tanzania’s commitment to improving the business environment for the benefit of both.
The first-ever two-day event has reportedly attracted over 700 participants from Tanzania Mainland, Zanzibar, and the European Union. In addition, investors from all 27 member states of the EU are taking part in the event alongside over 150 local investors.
The forum aims to identify areas where the expertise of the EU business community can accompany Tanzania in delivering its economic priorities.
While officiating the forum, Dr Mpango told prospective EU investors that Tanzania is now focused on building a vibrant economy underpinned by the 4Rs philosophy of President Samia Suluhu Hassan – reforms, reconciliation, resilience, and rebuilding – noting that foreign investment is vital to realizing that goal.
Mpango, who served as the finance and planning minister during the previous administration, pointed out that the government is dedicated to consolidating policy, institutional, and regulatory reforms to improve the business reform in Tanzania.
“The reforms seek to promote consistency and predictability of policies, laws, and regulations,” Dr Mpango told the forum’s participants. “They also aim at enhancing transparency, address red-tape and other related bottlenecks to trade and investment.”
The VP gave several examples that testify to the government’s commitment to improving the business environment in Tanzania. These include the decision to scrap over 230 “nuisance” taxes and levies that, according to him, were thwarting business growth in the country.
Tanzania has also strengthened its cooperation framework on taxation matters, including avoiding double taxation. Mpango said the government has concluded and signed agreements with ten countries on the issue.
The East African nation has also amended its Investment Act to introduce a level-playing field, shortening the time for obtaining an investment license from 14 to seven working days. The amended law also grants access to international arbitration to the parties to settle investment disputes.
According to an assessment shared by VP Mpango at the forum, the above reforms have already started paying off.
“We have observed that the total values of registered foreign investments have quadrupled from US$1.2 billion in 2020 to US$5.5 billion in 2022,” Mpango revealed. “Real GDP is now back on the recovery path – from the growth of 4.8 per cent in 2020 to 4.9 per cent in 2021 and an average of 5.2 per cent over the first, second, and third quarter of 2022.”
“We expect this forum to be a catalyst to increase EU investments in Tanzania and a venue to build confidence and trust,” Mpango said in his closing remarks. “We look forward to a partnership that will align with our aspirations to be not only the regional business hub but also a food granary for the world.”
According to figures presented at the forum, total trade between the EU and Tanzania nearly doubled from US$1.2 billion in 2019 to US$2.1 billion in 2022, accounting for 10 per cent of total trade in 2022.
The FDI stock of the EU-based companies was US$3.2 billion in 2019 compared to around US$2 billion in 2022, accounting for about 13 per cent of total FDI stock in 2022.
Speaking at the forum, EU Deputy Secretary-General for External Action Service Helena König described Tanzania as a country of opportunity and increasing economic potential as well as a logistical hub for trade.
“The economic operations need to see less of red tape and a good investment environment,” Ms König advised the government if it wanted EU’s investors. “[Investors] want to feel secure by [the presence] of clear regulations, rules of taxation and predictable application of the rule of law.”
Ms König said that the EU looks forward to strengthening and deepening its relations with Tanzania “through the conclusion of the Economic Partnership Agreements [EPAs] as we are doing in Kenya and we hope soon with Tanzania.”
Olivier Becht, French Minister Delegate for Foreign Trade, Economic Attractiveness and French Nationals Abroad, attached to the Minister for Europe and Foreign Affairs, said it was essential to promote Tanzania as a business destination for European private companies and investors.
“The EU-Tanzania partnership is supported by shared business values of free trade and sustainability,” Mr Becht said during his speech at the forum. “[Tanzania] is a gateway to six land-locked growing and insular countries in the Indian ocean. It has tremendous potential.”