The European Union (EU) has maintained its position as Tanzania’s largest trading partner, with two billion US dollar (over 4trn/-) trade volume last year, a new report has revealed.

According to the “European Investment in Tanzania: How European investment contributes to industrialisation and development in Tanzania 2016,” report, the European companies also account for 68 per cent of the total Foreign Direct Investments in Tanzania.

Launching the report in Dar es Salaam on 26 October 2016, EU Head of Delegation to Tanzania and EAC, Ambassador Roeland van de Geer, noted that the EU companies were also the largest taxpayers, paying 1.1 billion US dollars (over 2tri/-) in domestic tax in 2014, about 25 per cent of the total taxes paid by large taxpayers in the country.

“This goes to show that the over 1,000 European companies and individuals from large multinational corporations to small individual tourism ventures play a significant part in the development of the Tanzanian economy,” he said.

“This publication discusses the competitive edge that Tanzania has in trade, investment and production and the challenges that are currently faced. It also contains clear recommendations on the way forward. EU is committed to continue working with Tanzania and strengthening ties between our regions.

“The European companies have invested in energy, tourism, transport, banking, oil and gas, agriculture, mining, retail and trade, ICT, manufacturing and construction sectors. The envoy said the European private sector is well represented in almost all sectors of the Tanzania’s economy, with crucial impact on revenue collection and job creation.

“These are the best long term solutions for poverty reduction,” he said. EU Business Group Chairman, Mr Morten Juul, noted at the launching ceremony that Tanzania offers peaceful and stable environment, abundant natural resources and favourable geographical location.

“There are ample opportunities for European investors to work alongside local investors to create an active and successful private sector and continue to build the economy,” he said.

“We hope that through continued dialogue we can build an environment that further supports the EU investments in the country and we are willing to share our skills and experiences to address the current business impediments,” said Mr Juul.

Background Note

The Report describes the European investment in 11 sectors of the economy (agriculture, mining, upstream oil and gas, manufacturing, construction and real estate, power sector, information and communication technology, banking and finance, transport and logistics, tourism, retail and trade).

The countries in scope for this Market Study of European investment in Tanzania include the 28 member states of the European Union (EU), plus the affiliated European Free Trade Association (EFTA) countries of which Norway and Switzerland (EU+SN) are active in Tanzania.

For the purposes of this study, our definition of an 'EU+SN investor in Tanzania' draws directly on the OECD Benchmark Definition of Foreign Direct Investment. Following the OECD definition, a European investor in Tanzania is therefore any Tanzanian-registered business entity whose Ultimate Investing Country (UIC) is one of the EU+SN countries.

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Launch of the European Investment in Tanzania Study

Speech by H.E. Roeland van de Geer

Today we have done what is arguably the very best we can do for economic development in Tanzania. We have exchanged, open, free and well informed.

Professor Mkenda drove the whole night from Dodoma, showing great commitment and making the point for the future that Dodoma – Dar is not so far as we think!

All 12 EU missions in Tanzania were yesterday in Tanga, we visited the very place where the pipeline from Uganda will eventually reach the coast. There is a lot of European investment involved there.

When we moved on to the port, we were shown one of the oldest railway lines in East Africa, the Tanga Arusha line. Also there a lot of European investment involved, but in a totally different time under totally different circumstances in a period that is now far behind us. It is behind us due to the efforts and hard work of many millions of Tanzanians, led by five remarkable Presidents, the Presidents Nyerere, Mwinyi, Mkapa, Kikwete and today our President Magufuli.

Today, Africa and Europe are partners, we are building a relationship for the 21st century, a forward looking relationship. This relationship is broad and deep. It is a political relationship, with wide ranging cooperation in the international field, including in the UN, but is also an economic relationship, which development cooperation is and will remain an important element and in which trade and investment play also a decisive role as we have seen here today.

The discussion about the study was a fascinating one and it showed it was the perfect illustration of where Tanzania and EU stand today.

The work behind this study has been immense, as you can imagine. So first things first, I would like to extend my personal gratitude to all of those who have been involved in bringing this document alive, starting with Ashley Elliot, the consultant, for leading the analysis; all the European companies for feeding the study with detailed information on their respective sectors and the EUBG board and executive director for facilitating the research; to Government authorities for providing official statistics and responding positively to this initiative; and finally to my team in the EU Delegation for their motivation and perseverance along the entire process. The hard work has paid off!

I am pleased to see the interest aroused by the study and even more so by the debate that has just taken place. I optimistically trust that this is only the beginning of a dynamic and lasting process of further research and more discussions, feeding into a trusted and fruitful partnership between the public and private sector in Tanzania, in particular the European private sector.

The EU Investment study launched and presented today is intended to serve as a catalyst for more open debates on a way forward for strengthened interaction between public authorities and private sector. As demonstrated this morning, the private sector plays a key role in the future economic development in Tanzania, and specifically the European private sector has made a major economic and social contribution to the well-being of Tanzanian society.

As the Government of Tanzania and international partners join forces to lift millions of Tanzanians out of poverty, the role of trade and investment in the fight against poverty is now widely recognised. How foreign direct investments can maximise the effectiveness of selected poverty-alleviating policies by creating jobs, employment and training opportunities, how European investment can contribute to industrialisation of the country, these are the core of the debate we wish to engage in as development partners.

The European Union, and I trust I can speak on behalf of my fellow Swiss and Norwegian ambassadors, remains fully committed to close development cooperation with Africa. However the Private Sector in Tanzania is taking on a more prominent role in terms of investment, and as actor of development. The spill over effects on employment and revenue collection of foreign and local investment in Tanzania are numerous and beneficial. Therefore, it is crucial to integrate the private sector in the planning of national development policies and revising of a cooperation framework.

Against this background, last September, the European Commission presented an ambitious “European External Investment Plan” to promote investments in the African continent, to strengthen our partnerships and to promote a new model of participation of the private sector in development cooperation, as to ultimately contribute to achievement of the Sustainable Development Goals. The instruments available under the Plan will be accessible to investors, and all of us present here, collectively, need to ensure that Tanzania benefits from this Investment Plan.

The European Union Business Group is an initiative to praise within this evolving framework. Established to serve as a single voice of the European private sector and to connect with the Tanzanian private sector for joint actions. The EUBG provides a single platform for European investors already operating in Tanzania or willing to do business in the country, and as such, the EUBG can potentially become a strategic and trusted partner to support Government authorities in promoting further European investments into Tanzania as part of the GoT’s Five-year development plan.

This report, by presenting the challenges, but above all the opportunities to invest in Tanzania, will become an instrument of promotion for Tanzania to attract further European investment in the country. I also hope that it will feed the debate to reinforce an enabling business environment in Tanzania for European and local companies.

We are in 2016. The future is ours.

Let us learn from history. Colonialism, exploitation, violent conflicts, we all have witnessed it. Today, we need to look forward, globally, but also in the EAC region.

Tanzania, the EAC and the EU are working closely to promote peace and security in the Great Lakes region. And, ladies and gentlemen, imagine what peace and stability in Burundi, in the DRC and in South Sudan, can do for Tanzania, for the port in Dar es Salaam, and for trade and industry in Tanzania in general.

Let us be optimistic, let us join forces and let us move forward together.

We have seen today how much work lies ahead of us, in the port, at the borders, in Government, but also in the private sector.

The EU stands with the EAC, it stands with Tanzania. We have a long history, mostly for better, sometimes for worse. But we can choose to have a great future together and I feel that today’s meeting here was a main contribution to our joint and better future.

Let me once more warmly thank our guest of honour, PS Mkenda and also Mrs Blandina Kilama for moderating the session.

Thank you also to the panellists for their commitment and contribution to this debate: Mr Clifford Tandari, Acting Director of TIC; Mr Godfrey Simbeye, Executive Director of TPSF, Mr Raymond Mbilinyi, Executive Secretary of TNBC and Mr Morten Juul, Chairman of the EUBG.

I am looking forward to receive you tonight in the EU residence to toast on a better tomorrow.

Asanteni sana!