Tanzania has become one of sub-Saharan Africa’s leading investment destinations in recent years. The private sector is seen as the engine that will speed economic growth and lead the country to a prosperous future.

rom the great Serengeti Plains to Lake Victoria and the snowcapped peaks of Mount Kilimanjaro, Tanzania is a country on a grand scale. More than twice the size of California, and with a population of 32 million, the country is blessed with abundant natural resources in arable land, minerals, gold, diamonds, water and natural gas.

To develop its enormous potential, Tanzania needs outside assistance and in recent years has been undergoing a far-reaching process of change intended to attract foreign investment.
At the head of that process is President Benjamin Mkapa, who has initiated the wide-ranging market-based reforms needed to put the economy on the right track.

President Mkapa: “We are a real nation.”

President Mkapa’s aim is to catapult Tanzanians into a life free from poverty by means of sustained economic growth. He sees the private sector as the engine of that growth.

The government's commitment to sound macroeconomic policies, the ongoing privatization program, market liberalization and tax reforms have created an environment designed to stimulate both foreign and local investment. Foreign direct investment (FDI) in Tanzania has more than quadrupled in the past decade, from $50 million to around $225 million.

“No other country in Africa can claim to have more political stability,” President Mkapa says. “We are one of the few states in this region that can boast that we are a real nation.
“We are not just a state in territorial terms. Our people are united by a common language, and we have very strong institutions.

“We have systems of governance in place—both political and economic—and we have policies of participation, openness and transparency which build the confidence that this is the government of the people.”

Tanzania has been supported by a steady flow of assistance and debt relief from the international donor community. However, President Mkapa emphasizes that Tanzania seeks investment rather than handouts. “Since the time of independence, Tanzanians have demonstrated a spirit of hard-working self-reliance,” he declares.
“Tanzania is endowed with many natural resources, but we cannot develop and exploit them ourselves. We need capital and technology, and it must be complemented from outside by human resources development.”

President Mkapa regards it as important that foreign investment projects involve Tanzanians and do not amount simply to a takeover of national resources by foreign companies.
“We must build a capacity for partnership into FDI in order to
develop national enterprise,” he says. “Otherwise reforms will be interpreted as a process of selling out to the outside world. Investment must help to develop an indigenous capacity to explore the natural
resources of this country.”