Foreign investment still low

Tanzanian investors called for increased Foreign Direct Investment (FDI) following the release of a report on Tuesday prepared by the United Nations Conference on Trade and Investment (UNCTAD), local media reported. The report shows that Tanzania's FDI inflows have increased only slightly from US $183 million in 1999 to US $193 million in 2000. Speaking during the launch of the report in Dar es Salaam on Tuesday, the Director of Investment at the Tanzania Investment Centre (TCI), Emmanuel ole Naiko, said the amount was not impressive given the economic needs of the country. "We need at least US $1 billion in FDI inflows in order to cope with the changes we have predetermined in our economic recovery programmes," he said.

However, Ole Naiko added that he was generally impressed by the performance of African countries in attracting FDI, saying that peace was a major determinant which lured many investors. Officials named infrastructure, management and bureaucracy as other factors that determine FDI inflows. This year's report, which provides information on country and company experiences, also looked at the geographical distribution of FDI. Although FDI had reached more countries than in the past, the pattern of investment remained uneven, the report noted.

The report showed that FDI inflows into Africa had declined for the first time since the mid-1990s from US $10.5 billion in 1999 to US $9.1 billion this year. Africa continues to trail far behind other developing countries in attracting FDI. The decrease was recorded after an increase of US $2 billion in the previous year, the report added. Consequently, the report indicates, the share of Africa in world FDI inflows, which was already low, became even smaller, falling below one per cent in 2000. The report says that the fall in FDI is due to the halving of inflows to major recipients such as Angola, Morocco and South Africa. "However, FDI flows in these countries, as well as to Africa as a whole, are still much higher than those at the beginning of 1990s, mainly due to sustained efforts of many governments to create a more business friendly environment after turbulent and lost decades in the 1970s and 1980s," the report emphasised.