Although there is a decline of foreign direct investments (FDIs) in most countries since the global economic recovery, Tanzania has recorded an 8.5 per cent increase of FDIs in 2010, a new report shows.
According to the World Investment Report 2011 released by the United Nations Conference on Trade and Development (UNCTAD) in Dar es Salaam yesterday, the inflow of the FDIs in Tanzania increased from $645 million in 2009 to $700 million in 2010.
Tanzania is second in the East African region after Uganda whose inflows increased from $816 to $846 million in 2010.
Kenya experienced a decline from $141 million to $133 million during the same period. The director of investment promotion and acting executive director of Tanzania Investment Centre (TIC), Mr Raymond Mbilinyi, associated the increase to growing confidence of transnational corporations in the economies of developing nations.
“This also demonstrates the growing importance of the economies as sources of international investment,” said Mr Mbilinyi during his ten-slide presentation.On sectoral basis, he said, much of the investment went to manufacturing, bouncing back from the sector’s poor performance during the period of the global financial-cum economic crisis.
He however, noted a decline in FDI in the service sector.
Mr Mbilinyi warned that the power crisis is likely to affect FDI inflows this year if the problem remains unresolved. “Investors always consider long-term strategies like future government plans to deal with the power crisis,” he said.
He added that more investment inflows were directed to Uganda than other EAC partner states due to oil discovery in the country. The report shows that East and South-East Asia and Latin America experienced strong growth in FDI inflows of 34 and 14 per cent, respectively, while those to South Asia, West Asia, and developed countries continued to decline.
The inflow of FDIs decelerated in Africa from $73 billion to $60 and $55 billion in 2008, 2009 and 2010, respectively.
Globally, the report shows the flow of FDIs had increased from $1.185 trillion in 2009 to $1.244 trillion though it has not yet reached the pre-crisis level which at its peak was $1.971 trillion in 2007.