The value of new investments in Tanzania declines by 44.4% last year. However, the number of ventures funded by domestic people has gone up sharply. The statistics rolled out by the National Bureau of Statistics (NBS) in its report on the national economy for 2018 reveals that that the value of new projects registered by the Tanzania Investment Centre (TIC) fell to US$2.82 billion in 2018 from $5.07 billion in 2017.
The drop was mainly due to removal of financial incentives on expansion projects and non-capital goods. However, the details of the decline are still to be ascertained in precise terms. The TIC authorities seem to be tight lipped about the development The report indicates that the number of TIC-registered projects declined by 37.7 per cent, which is a huge drop, that the authorities will find difficulties in giving a plausible explanation. .TIC registered a total of 215 projects in 2018 as against 345 in 2017. New projects in 2018 created a total of 27,469 jobs compared to 30,728 that were created in 2017.
The decision of the Tanzanian government to withdraw the tax incentives was mostly on account of the misuse of the provisions to evade taxes. The withdrawal was effective from 2016-17. The new system stipulates that businesspeople, public servants, religious institutions and non-governmental organizations are required to pay tax on goods ordered in advance. The tax proceeds are supposed to refund to beneficiaries after confirmation that the goods have been used for the intended purpose. The report also mentions about a major drop in new foreign-owned projects from 168 in 2017 to 69 in 2018. At the same time, there was a rise in projects implemented by Tanzanians to 132 in 2018 from 84 the previous year.
The business services accounted for the highest value of registered projects last year, with NBS figures showing that TIC registered a total of 16 projects worth US$1.017 billion. The second was manufacturing sector with a total ofUS$639.18 million investment in 108 projects. The third is the agriculture with a total investment of US$506.87 million into 12 agricultural based projects.
The construction and transport sectors followed the ranking . Dar es Salaam maintained its position as Tanzania’s economic nerve center in 2018 by registering a total of 109 projects. The Coast Region, the immediate neighbor of Dar es Salaam, came second, registering 37 projects in 2018.
