Tanzania introduces new Investment Act

Tanzania is on the path to revamping its economy with the introduction of a new proposed Investment Act. The Act, currently in its first reading, is designed to foster a more conducive environment for trade and investments, both locally and internationally. Salum Awadh, the CEO of SSC Capital, shed light on this development in an exclusive interview with CNBC Africa. The government's eagerness to reform the investment landscape stems from the overarching goal set by the current president to enhance Tanzania's investment climate. The existing Investment Act, in effect since the 1990s, no longer aligns with the country's vision for economic growth and development. Over the years, various changes and reforms have underscored the necessity for an updated investment framework. With the political will to drive these changes forward, Tanzania is poised to usher in a new era of investment opportunities. One fundamental change proposed in the Act is the significant reduction, by 50%, of the capital requirements for local businesses to access governmental benefits. This adjustment seeks to address the limitations that small to medium-sized local investors have faced in participating in and benefiting from the incentives provided under the current legislation. By lowering the financial threshold, more domestic investors can engage in the flourishing investment ecosystem in Tanzania. Additionally, the revised investment bill aims to resolve conflicts between the Investment Act and other regulatory statutes. Previously, discrepancies arose when investors were entitled to certain benefits outlined in the Investment Act which were not supported by industry-specific laws. The new legislation intends to establish the Investment Act as the primary directive governing all investment-related matters in Tanzania, ensuring uniformity and coherence across different sectors. As a result, the act will have a unifying effect, simplifying procedures and mitigating legal complexities for investors. Foreign investors are also set to benefit from the proposed reforms. The streamlined processes outlined in the new Investment Act will lead to a reduction in bureaucratic hurdles, ultimately shortening the timeframe from application submission to business establishment and post-establishment support. By enhancing coordination among government entities and private sector organizations, the Act aims to create a more efficient and investor-friendly environment. This strategic approach not only facilitates the establishment of foreign businesses in Tanzania but also fosters stronger ties between international investors and the government. As Tanzania positions itself as a favorable investment destination, the new Investment Act is expected to bolster economic growth by attracting a diverse range of local and foreign investments. These reforms hold the promise of propelling Tanzania towards sustained prosperity and solidifying its status as a key player in the global investment landscape.