An Emperical Study on the Strategies to Attract Foreign Direct Investments in Tanzania

Abdulla R Abdulla,Zhao Hongzhong,Maryam M Othman

doi:10.24212/2179-3565.2012v3i1p43-52

Abdulla R Abdulla, Zhao Hongzhong + Show 1 more

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https://doi.org/10.24212/2179-3565.2012v3i1p43-52

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Abstract

This paper dwells on the investment strategies in attracting FDI into Tanzania, the investment reforms have been expected to become a major factor responsible for the increased FDI inflow in to the country, these reforms including political system, economic management and government administration. Despite of the several efforts such as the far reaching reform in the economy done by Tanzania to increase FDI inflows in the country, the results are far from satisfactory. It has been revealed that the unsatisfactory FDI inflow into Tanzania is primarily caused by the improper strategies resulted from the inadequacy of FDI determinants in the country. The study found that Tanzania lacks the adequate strategies due to poor FDI determinants that would attract a substantial FDI inflow into the country. This makes it necessary for the country to make sure that the determinants like better infrastructure, adequacy of government agencies; favorable macro economic, political conditions are available in adequate amount and quality. It is concluded that proper strategies in influencing investment regulatory frameworks, policies that promote macroeconomic stability, improved physical infrastructure and institutional reforms are important in attracting more FDIs into a country and therefore are highly recommended.

Highlights

Most countries have recognized the importance of FDI inflows for their economic growth, poverty alleviation and development in general
2 Methodology This paper aimed at exploring the scene behind success and failure of Tanzania as a destination for FDIs inflows by investigating Tanzania as a host country under her policy notably motivating factors, offering necessary incentives, main problems in operating business, government agencies causing difficulties and the Tanzania future economic outlook
It is found that all of the company surveyed agreed that stable and sustainable macroeconomic environment boosts the confidence of private investors to invest in to Tanzania as the Table 2 below indicates that 77.3% show their strongly agreement and the remaining 22.7% agreed on this factor

Summary

Introduction

Most countries have recognized the importance of FDI inflows for their economic growth, poverty alleviation and development in general. Most governments have been actively promoting their countries as investment locations to attract scarce private capital and associated technology and managerial skills in order to help achieve their development goals. They have increasingly adopted measures to facilitate the entry of FDI. Tanzania has put in place a number of proactive measures to facilitate the business that foreign investors undertake in the country 4 These include the promotion efforts and investment incentives of foreign direct investors, reducing corruption and improving administrative efficiency, after-investment services and the provision of social amenities[5]. Despite of that several efforts to increase FDI inflows in the country, the results are far from satisfactory, there fore more efforts should be putting in place to improve this scene[7]

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