Tanzania's foreign direct investments (FDI) reached a remarkable milestone in the third quarter of this year, doubling compared to the same period in 2022. The surge saw the East African country's FDI reach $1.05 billion between July and September 2023, compared to $524.4 million in the corresponding period last year.
The data, released by the Tanzania Investment Center (TIC), underscores a significant achievement for Tanzania's FDI targets. The country has set ambitious targets to reach $15 billion in FDI inflows by 2025 and $30 billion by 2030.
The TIC report attributes the increase to growing investor confidence in the East African nation. However, it also mentions that while FDI has increased significantly, there has been a notable decline in local investment, resulting in a 14% drop in new investment capital during the period under review, from $2.41 billion to $2.06 billion.
The data further shows that foreign direct investment accounted for 51% of new investment, outpacing local investment, which declined from $1.91 billion in 2022 to $1.01 billion in the current year. The real estate sector attracted about half ($480.38 million) of the new FDI, while manufacturing projects in Tanzania received $245.58 million.
On the other hand, domestic investors showed more interest in projects related to agriculture ($420.25 million), economic infrastructure ($212.52 million), and transportation ($178.32 million).
Tanzania's robust growth in FDI reflects the government's commitment to fostering partnerships with global powers. President Samia Suluhu Hassan has championed a business-friendly administration, focusing on creating an environment conducive for foreign investors while encouraging domestic investment.
Throughout the year, the Hassan administration forged significant partnerships with several countries, including South Korea, China, and Australia. China emerged as the leading source of FDI in Tanzania, bringing in $614 million in new investment capital during the period. Other notable sources of FDI included Singapore ($138.9 million), Germany ($118.6 million), India ($42.3 million), and Mauritius ($24.8 million).
President Hassan's economic vision is deeply rooted in transforming Tanzania into a global economic powerhouse. In fact, the International Monetary Fund has projected that Tanzania's economy is on track to surpass Kenya's, East Africa's second largest economy.
In addition, President Hassan has been active in promoting partnerships within the East African Community (EAC) and has signed agreements with neighboring countries. These agreements include working with Burundi to build an interconnected electric railway, and with Kenya on a $1 billion energy project, amongst other regional initiatives.