East Africa nations urged to jack up DDIs

2006-03-20 08:53:09
By Pacifique Nkeshimana, recently in Arusha

Governments of the East African Community (EAC) have been challenged to empower the private sector, especially the Domestic Direct Investors (DDIs) to enable them effectively compete with foreign investors.

The call was made at an exchange of ideas forum, during a three-day meeting on investment promotion in EAC region held in Arusha.

Participants said that the governments should give subsidies to local investors so that they compete with Foreign Direct Investors (FDIs).

The regional meeting was organised by the East Africa Business Council (EABC) in collaboration with the United Nations Economic Commission for Africa (UNECA) and the Rwanda Private Sector Foundation.

Participants noted that foreign investors bring their capital to invest in the region targeting to maximize their benefits rather than to work for the development and social welfare of the respective nations.

’Domestic Direct Investors need to be empowered so that they compete with their foreign counterparts.

This would enable the populations of the region benefit from the resources existing in their countries,’ a prominent Tanzanian businessman noted.

Dr Felix Ugbor, the Chief of UNIDO Africa Programme said that most Foreign Direct Investments were being attracted to invest in other foreign companies already existing in the host countries and that they want to earn capital returns plus profits quickly.

He urged the EAC leaders to first identify the impact of several types of FDIs in their economies in order to choose the best options.

’The governments should do a survey on foreign investors who are in the region to see who they are, why they came, what they seek, how they perform and what they need before they sign contracts with them,’ he emphasised.

Patricia Mhondo, a senior officer with the Tanzania Investment Centre (TIC) said The Netherlands, Italy, Germany and United Kingdom (UK) presently lead the top ten countries that have registered with TIC for investments.

Commenting on Investment Promotion Programmes with European Union countries, she said that France, Austria and Southern Europe countries, such as Turkey, Croatia, Slovenia, Check Republic and Greece had also registered with TIC for investments.

Mhondo also said that Tanzania has bilateral treaties with EU countries such as Denmark, Sweden and Switzerland.

’In order to bring its services closer to investors, TIC launched its first zonal office in Kilimanjaro in 2004 and the northern office caters for Kilimanjaro, Tanga, Arusha, Manyara and Singida,’ she said, adding that the investment promotion agency would this year open another office in Mwanza to service the Lake Zone.

She explained that TIC in collaboration with the Bank of Tanzania (BoT) and National Bureau of Statistics (NBS) conduct annual surveys to collect, analyse and monitor all types of Foreign Private Capital (FPC) for balance of payment, investment and macroeconomic policy formulation.

The TIC technocrat said Tanzania offers many investment opportunities, including floriculture and horticulture, adding that investment in floriculture had increased from 10 hectares in 1991 to over 80 in 2004.

Other investment opportunities are mainly in agro-based industries to meet Tanzania’s ambition to move from being a primary goods producer to a finished brand product economy.

’Tanzania also has 88 million hectares suitable for agriculture of which 60 million are suitable for livestock production and with irrigation, Tanzania can become a leading grain exporter,’ she said.

She added that the country’s climatic conditions could accommodate production of a wide variety of agricultural products.

On mining sector, Mhondo said Tanzania possessed a comprehensive geological and mineral database compiled in the 1930s.

The detailed research indicated there were so many minerals still unexploited, which she said both local and foreign investors ’are welcome to mine and further develop the country’s mining industry.’
• SOURCE: Guardian

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