The original report was published in The Independent on Friday, December 9, 2011
A modern approach to progress
Moving on from its socialist past, Tanzania is creating an open, forward-thinking economy
Dr Mohamed Gharib Bilal, Vice-President of Tanzania
Diane Corner, British High Commisioner to Tanzania
Over the past two decades, Tanzania has experienced a remarkable political and economic transition, which has brought in rising levels of foreign direct investment (FDI) and economic growth, as it moved from a socialist state with a centrally planned economy to a multi-party democracy with a liberalised free-market economy.
The country has come a long way from its socialist days when its state-controlled financial sector had only a few slow-moving institutions; nowadays it boasts a well-regulated and supervised financial system with almost 40 banks and other financial institutions. Sensible policies and the relative isolation of the banking system have helped Tanzania to weather the financial crisis well. Direct government influence in Tanzania’s banking and finance sector has gradually diminished, and since the deregulation policies of the 1990’s, the country has attracted numerous international banking institutions. However, rising international commodity prices, especially for oil, have had a negative effect on the local economy and have increased the risk of inflation. At the same time, the shilling has depreciated significantly against the US dollar in the past year, due to the volatility of international currencies and the economic crises facing Tanzania’s main trading partners.
Resource-rich and breathtakingly beautiful, Tanzania needs private-sector involvement across the board if it is to fully capitalise on its natural assets, human capital and the pro-business attitude the government has nurtured. President Kikwete’s administration has gone to great lengths to improve transparency, enhance good governance and create a financially secure, investor-friendly environment for both national and foreign investors. Challenges remain, however, such as securing adequate electricity supplies and improving infrastructure.
British involvement is increasing, according to the Tanzanian Investment Centre (TIC); there are more investors here from the UK than from any other country.
“A lot of British investors are individuals and small companies,” says British High Commissioner to Tanzania Diane Corner. “Of course, the big players are also here – Standard Chartered Bank, Unilever, Barclay’s, Diageo, PriceWaterhouseCoopers etc. We have a diversity of investors and a very active British Business Group here, whose members range from FTSE 100 companies to small, private set-ups. If you look at the amount that has been invested since 1991, Britain is way ahead of any other country. It is quite extraordinary.”
Tanzania’s Vice-President Dr Mohamed Gharib Bilal agrees: “We have learnt so much from the British; our history is entwined in so many ways. Our management style, our education and defence is all from British traditions and institutions. We also have a good relationship in terms of trade, services and bilateral communications between the countries. We are striving to create new opportunities to cooperate and attract more UK investment for the energy sector, service industry and institutional management.”
Barbara Jankovic (Director) & Michael Pietraszek (Assistant)
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