The region however, remains poor in spite of its richness in resources because they are exported mainly in primary form, with little or no local value addition and processing as well as minimum local inputs.
Delivering her welcoming remarks at the 5th Southern African Development Community (SADC) Investment Promotion Agencies Forum recently in Dar-es-Salaam, the Executive Director of the Tanzania Investment Centre (TIC), Juliet Kairuki, said that extractive industries needed to be explored by promoting and facilitating the investment.
According to Kairuki the objective of the forum was to accelerate the regional economic integration agenda and promote peer to peer learning amongst SADC investment promotion agencies.
“Indeed, this is where the role of investment promotion agencies comes in! I commend all chief executives of SADC investment promotion agencies for attending this event. I have no doubt in my mind that this meeting will be a resounding success,” she said.
She further said “This year’s event objective is centred on the theme ‘Investment promotion and facilitation for Industrialisation’.
I find the theme of this forum to be very opportune indeed for us in the SADC region,” Kairuki explained.
Despite being at different levels of development, one common factor in all SADC countries is that all member states are developing countries. Almost all countries in this region continue to strive for industrialisation.
According to her, Tanzania has experienced strong economic growth in recent years, with the country being classified as one of the fastest growing economies in sub-Saharan Africa.
She further retaliated that, it was for that reason of the consistent economic growth and developments in Tanzania that the SADC Secretariat requested TIC to host the Forum in order to afford other member states an opportunity to learn from Tanzania’s transformation experience.
It should be noted that Tanzania achieved real Growth Domestic Product (GDP) growth rate of 7.0 percent in 2014, some of the contributing factors being an increased investment in infrastructure, mainly road construction and energy.
Also, favourable weather condition for agriculture activities, improvement in trade, manufacturing and financial services accounted for this good performance.
Tanzania’s Gross Domestic Product (GDP) exceeded the 90 trillion/- mark in the year 2015, buoyed by the communications, mining and financial services sectors, while agriculture-the mainstay of the national economy – continued to lag behind Information and communication contributed 23 per cent to the GDP.
When public administration and defence attained 19.7 per cent; finance and insurance had 13.6 per cent and mining and quarrying 10.6 per cent, agriculture 2.6 per cent; water supply 1.4 per cent and accommodation 1.7 per cent.
Overall, the country’s economy recorded a growth of 7.1 per cent in 2015 compared to 7.0 per cent in 2014, with a further rise to 7.2 per cent expected this year.
Domestic savings also improved from 16.9 percent of GDP in 2013 to 20.6 percent in 2014. However, the savings were below the regions convergence threshold of 35 percent.
The trend is associated with more than proportionate growth in the component of GDP that is associated with foreign inflows.
Further, domestic investment level was 26 percent well below the target threshold. The indicated economic growth was mainly supported by increase in FDI, rise in productivity and stability in sources of energy particularly electricity.
Tanzania’s economy has faired well on primary convergence benchmarks set by SADC region, achieving single digits inflation as well as the public debt ratios which has been consistently maintained below the convergence criteria of 60 percent of GDP.
In the secondary category, Tanzania has not done well in all secondary indicators except the real GDP, which grew by 7.0 percent in 2014 and 7.1 per cent in 2015.
In view of this, I believe all key stakeholders from SADC member states attending this Forum will be able to share with us their experiences as well.
TIC boss, further retaliated that, Tanzania has great prospects and opportunities for future. When looking in terms of FDI, the country has emerged as the leading East African country in attracting investments and inflows of FDI in recent years.
The FDI inflows into Tanzania represented its highest level in 2014 given that it attracted slightly over USD 2,142 million, compared to its last peak of USD2, 131 million in 2013.
This amount is significantly higher than the very low level of USD640 million that flowed into the country between 2005 and 2007 (pre-crisis). This achievement is primarily due to gas discoveries in Tanzania.
Importantly, in Tanzania FDI inflows were almost fully financed by equity and retained earnings, which signals the confidence of foreign investors in the country’s economic prospects.
According to this report, South Africa is largest recipient of FDI in 2014 with inward FDI Stock of USD145, 384 million.
“I have no doubt in my mind that if we put our efforts together, the SADC region can easily become a major economic powerhouse on the continent. It offers unique and highly promising opportunities for investment and trade.”
Kairuki urged participants to the SADC high level meeting that, effective delivery of service to the people, putting corruption in check, promoting democracy, rule of law and respect for human rights and broad based inclusiveness, were crucial in attaining positive impact on economic growth, peace and stability.
“So, as we vigorously pursue the goals of investment promotion, economic growth and boosting productivity and competitiveness, we are not oblivious to the centrality of good governance as a critical factor for social cohesion and for building the confidence of our investors,” she noted.