20 September 2017

Tanzania: Dar Not Safe Haven for Crooks

THE Tanzania Investment Centre (TIC) has rubbished the widely circulating claims in international and local media outlets that Tanzania's investment climate is unfriendly, causing investors to run away.

The claims that started making headlines since Monday was a reaction to a report by 'Rand and Merchant Bank's seventh edition of Where to Invest in Africa' that actually stated that Tanzania was doing better in terms of attracting investment in Africa.

According to the edition of 'Where to Invest in Africa 2018, RMB's Investment Attractiveness Index', Tanzania has jumped to the seventh slot from the ninth position it was placed before, thanks to a host of businessfriendly reforms aimed at rooting out corruption and steady economic growth.

"Where is this rumor originating from? Records at TIC show the country is performing well in terms of attracting investments," Mr Geoffrey Mwambe, TIC Executive Director, said yesterday.

According to Mr Mwambe, TIC has removed all bottlenecks that were hindering smooth setting up of new investments, adding that, "today a new investor is capable of completing processes of acquiring all documents, allowing him to establish investment in three days."

He insisted that all services related to processing of such documents were provided at one point (One Stop Centre), insisting the claims made public were utterly false and baseless, bent on tarnishing the country's good image before the local and international community.

"Today, Tanzania is among ten fastest growing economies in the world, pegging its growth rate at 7.2 per cent. It is also the leading country in East Africa in terms of investment attraction," he said.

He added: "The international community, especially investors should completely ignore the claims circulating. Tanzania through its institutions, including TIC ensures and will continue to ensure that investors conduct their businesses in friendly environment and get good returns.

" Giving figures, Mr Mwambe said for the two years Tanzania registered investments worth 1.35 billion US dollars, equivalent to 3trl/- followed by Uganda that registered investments worth 537 million US dollars, down by almost half of what Tanzania recorded in the same period.

The TIC Managing Director made it clear that despite the achievement recorded, the Centre would continue to take more drastic measures to attract investors, including exploring investment opportunities before making them public to potential investors, such as reliable markets in and outside the country, incentives offered by the centre and land availability.

Dr Hilderbrand Shayo, an expert in economy, said for investors who want to conduct their business in a transparent and accountable manner, Tanzania is the right place.

"Those who claim that the measures being instituted by the current government are unfriendly to investment are the ones who were fond of 'cutting corners', refusing to adhere to the laws, rules and regulations," he said.

Professor Ibrahim Lipumba, an economist-turned politician, said potential investors always rushed to invest in countries with comprehensive tax system but unscrupulous investors shunned away from them.

"Large-scale businesspeople eager to illegally reap huge profits will never come to invest in Tanzania. What is only needed on our part is to establish comprehensive and predictable tax systems," he said.

Prof Lipumba called upon the government to strongly and promptly counter the propaganda that tarnishes the country's image before the eyes of investors.

Prof Razack Lokina from the University of Dar es Salaam said for a long time, investors have been complaining of corruption practices that ended up increasing the cost of establishing investment.

"Any investor who is not ready to pay tax is just like a thief. Any serious investor knows that paying tax is an obligation," he said.

Speaking about turbulence that the banking sector was facing, the economist said the sector was just in transition period.

According to the claims raised, the measures being taken by fifth phase government of restoring discipline and sanity in all sectors of the economy and rooting out corruption have caused some investors to close down businesses and carry out massive layouts.

It was also claimed that some investors were leaving in droves and that many of the banks were on the verge of collapse due to a high level of nonperforming loans.

Furthermore, it was claimed that some sectors were reporting massive reduction in turnover and profits, mining companies being targeted with extremely questionable commodity value assessments and subsequent extortionate bills for tax, tourism industry experiencing similar difficulties, investors being harassed and tourism sector paying 56 different types of taxes and fees.

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