Tanzania has experienced a noteworthy upswing in Foreign Direct Investment (FDI), surging by 109.8% to USD 1.1 billion between July and September, compared to USD 524.4 million in the corresponding period the previous year. This substantial rise is attributed to increased confidence in Tanzania’s economic potential and investment prospects.
During this period, China emerged as the principal source of FDI, injecting USD 614.0 million, constituting 55.8% of the total FDI in new investment capital. Other significant contributors included Singapore with USD 138.9 million, Germany with USD 118.6 million, India with USD 42.3 million, and Mauritius with USD 24.8 million. These statistics align with Tanzania’s ambitious objectives to elevate FDI inflows to USD 15.0 billion by 2025 and USD 30.0 billion by 2030, a substantial increase from the USD 2.0 billion recorded in 2021.
However, the Treasury International Capital (TIC) report also highlighted a simultaneous decrease in domestically sourced investments, resulting in an overall 14.0% decline in new investment capital from USD 2.4 billion to USD 2.1 billion. FDI accounted for 51.0% of the new investments, while domestic investments contributed 49.0%, marking a 47.1% decrease to USD 1.0 billion in the first quarter of 2023, down from USD 1.9 billion in 2022.
The real estate sector attracted nearly half of the new FDIs, totaling USD 480.4 million, while manufacturing projects received USD 245.6 million. In contrast, domestic investors displayed a greater interest in agriculture, with USD 420.3 million, economic infrastructure with USD 212.52 million, and transportation with USD 178.3 million.
The TIC report unveiled a significant decline in total investments in Tanzania’s manufacturing sector, plummeting by 500.3% to USD 356.0 million in Q1 2023 from USD 2.2 billion in Q1 2022. However, the tourism sector experienced an increase in new investments by 11.8%, reaching USD 40.6 million from USD 36.3 million in 2022.
Out of the 137 new foreign and domestic investment projects approved by TIC in Q1 2023, 49 were fully foreign-owned, 43 were joint ventures, and 45 were wholly owned by local investors. More than half of these projects were concentrated in Dar es Salaam and the neighboring coastal region, totaling USD 985.6 million, while the administrative capital Dodoma attracted USD 62.2 million in new projects.
