Tanzania export zones attract $1b

News 

Sunday, March 16, 2014 

JOBS: Meru said in 2013 they were expecting 25 big investors and instead got 31.

Dr. Aldehelm Meru, the Director General of the Tanzania Export Processing Zones Authority (EPZA), recently highlighted the success of the government’s policy during the past 10 years to attract investment both in processing and manufacturing.  Some $1.02 billion has already been spent in setting up various enterprises. Last week, he spoke to East African Business Week’s Kenan Kalagho. Below are excerpts. 

Question: It’s now over 10 years since the inception of the EPZA, do you think the idea was appropriate and have you been able to achieve the anticipated goals?

 

Answer: The idea of introducing the Export Processing Zones Authority in the country was very right, because the country has been able to create more than 27,000 direct jobs and over 80,000 indirect jobs, attracting some $1.02 billion in capital investment for 98 companies. These companies with EPZ schemes are involved in both processing and manufacturing processing.

Have you then been able to surpass your set targets in terms of job creation and industry investment and if yes, what have been the reasons behind this success?

 

Yes, we have been able to surpass the targets in both job creation and industry investments.

Last year alone, we managed to attract 31 big investors while our target was only 25. These achievements have been due to community’s good understanding on EPZ in-terms of available opportunities and benefits to investors. 

We have also managed to create a lot of awareness on EPZ and the commitments of our team in promoting EPZ both locally and internationally as well as the governments political will in supporting the infrastructure especially electricity, that has helped the scheme to be attractive and get more investors. 

There is the issue of tax exemptions offered by the government to investors; do you think this is appropriate considering the conducive environment the country is endowed with?

 

The public need to understand that it is very important and appropriate for a country to offer tax incentives to investors. There is a perception that giving incentives to new investments is loss of government revenue. 

You give incentives to new investments which means that revenue is not there in the first place. 

 

How can you lose something that you did not have in the first place and you cannot claim to lose revenue to a company where there was no tax at all? 

 

For example, in mining sector you can talk of losing revenue if incentives are offered because we have the resources on the ground, but with industries it’s a different story because sometimes investors go to a place where there is no industry at all and therefore you cannot claim to lose revenue in such circumstances. These incentives are given even in other countries like Kenya, Ghana, China, Namibia, Malaysia, Nigeria and so on.

What countries have invested the most in the EPZ in Tanzania and in what capacity?

 

The countries that are investing much in EPZ in Tanzania include, India, seconded by China, South Africa, Thailand and the USA. Most of these investors are mainly investing in agro-processing industries followed by mineral processing and engineering.

Apart from the current EPZ areas of Dar es Salaam, Bagamoyo and Mtwara, Are there any plans to scatter these projects to other regions?

We have set aside land to be able to scatter the program throughout the country in mainly 20 regions in the country. 

We want to work with regional authorities to locate us land for EPZ between 500 hectares to 2,000 hectares of land which will be used for the projects in such regions

In your own view, is it appropriate for Tanzania as a country to join forces with other East African countries and sign the Economic Partnership Agreement (EPA) with the European Union countries?

 

I do not have a problem with the EPA, because it makes us closer to European countries and it will help us trade direct as a bloc with EU countries. It enables us to get markets in European countries. It would increase trade and it is good to have partners in business as it helps us to trade duty-free with the EU.

Our countries rely entirely on exports, because we need foreign currency to be able to balance foreign payments whenever we import oil, machinery, medicines and so on.

The problem is the conditions which favour one side (EU) and as an East African bloc we are not pleased with the conditions that have so far been set, because we need a partnership that would be solely a win-win situation.  

Any advice to Tanzanian’s with regards to EPZ?

 

We need take the advantage of the EPZ and Special Economic Zones (SEZ) schemes which have a lot of opportunities and benefits. They provide lucrative incentives that enable investors to get back their investment capital at the best earliest time. Tanzanians should not lean back and wait for foreigners to come and take advantage of opportunities which exist, on the contrary they should stand forward and grab the opportunities to make sure that its we Tanzanians who are developing our economy.