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OECD Investment Policy Reviews: Tanzania 2013

image of OECD Investment Policy Reviews: Tanzania 2013

This review of investment policy in Tanzania evaluates the current policy situation and makes recommendations for  enabling Tanzania to attract higher investment to exploit its full potential and become a regional trade and investment hub. The review finds that while private investment in Tanzania has considerably risen since the early 1990s, further progress can be made to improve the business climate and attract more investment in key sectors, such as infrastructure and agriculture.

Informed by the subsequent chapters of this report, this overview provides policy options to address these challenges. In particular, investors’ rights and obligations could be rationalised and made more accessible and regulations on foreign investment and investment incentives reviewed. The land legislation could be revised and land rights registration accelerated, notably by providing stronger incentives for registration. The short-term and long-term costs and benefits of the regulatory restrictions imposed by crop boards and of export bans could be closely analysed.

English

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Infrastructure investment policy in Tanzania

Better channelling investment toward infrastructure represents a central challenge for Tanzania, and the potential of infrastructure investment, both as a facilitator for development and as an attractive investment channel, remains underexploited. This chapter first charts the state of the country’s key infrastructure sectors, which suggests that electricity provision and the energy sector more broadly present particular challenges. Elaboration of very clear guidelines for development of the natural gas sector, which has high potential for meeting domestic energy generation challenges, has become highly necessary and the government has begun taking several steps in this regard. The regulatory and policy framework for infrastructure development and investment is then investigated in detail, with sector-specific examples. Persistent structural problems include a heavy dominance of inefficient parastatals in infrastructure provision, accompanied by a very poor track record for privatisation and private involvement in utilities in the past. Adequate implementation of the recent regulations for private sector involvement in public infrastructure provision, as well as placing parastatals in a more competitive environment, will be crucial in coming years.

English

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