Promoting Investments in Tanzania: Assessment of the Law and Practice of Export Processing Zones and Special Economic Zones

Abstract

This study is a result of the various reports of the Controller and Auditor General (CAG) of Tanzania addressing poor performance of the Export Processing Zones Authority and hence poor returns of the Export Processing Zones (EPZs) and Special Economic Zones (SEZs) in Tanzania. By use of library research technique, the author reviewed different literatures to assess the practice under which EPZs and SEZs are established and run in Tanzania. Again, the author analyzed the laws with the view of assessing whether they promote and protect investment in the EPZs and SEZs and thus whether they meet the basic international standards. It is concluded that the laws governing EPZs and SEZs in Tanzania are investor friendly; this is because they provide for basic requirements that promote and protect investments under international law. These requirements are incentives and foreign dispute resolution within the scope of Bilateral Investment Treaties, Multilateral Treaties, ICSID Convention and the rules of procedure for arbitration of international Chamber of Commerce. Again, when it comes to practice in the implementation of the EPZs and SEZs in Tanzania, literature and current affairs news shows that Tanzania is very much affected by different problems. These problems are like insufficient capital for providing infrastructures in and out of these EPZs and SEZs, bureaucracy and corruption among government officials implementing these projects. Other problems includes lack of focus by the Tanzania government in implementing these projects; also politics and inconsistency in government implementation of the country’s important projects; and short focused policies, guidelines and regulations of the EPZA in running the EPZs and SEZS. The study recommends the following:- The government should encourage private sector to run these schemes than itself and it should implement strategic investment in other sectors that support implementation of EPZs and SEZs. Not only that but also the government established EPZs and SEZs should be done in phases; there must also be strict Laws on officers of the EPZs and SEZs who misuse their powers; again, the government should require investors to improve employment packages and trainings and lastly the government should review fiscal incentives to make them benefit both parties.