POWER CYCLES

Tanzania 2014 | ECONOMY | INTERVIEW

TBY talks to Juliet R. Kairuki, Executive Director of the Tanzania Investment Centre (TIC), on the country as an FDI destination, issues for investors, and the outlook for investment in power generation.

Juliet R. Kairuki
BIOGRAPHY
Juliet R. Kairuki recently assumed the role of Executive Director of the Tanzania Investment Centre (TIC). This presidential appointment mandates the advising of the government on investment related matters, as well as promoting and facilitating investment in Tanzania. Previously, she worked in South Africa for 12 years, 10 of which were in the banking sector. As General Manager of the Banking Association South Africa, she oversaw the implementation of strategic projects in the SADC region. Kairuki is a specialist in public-private partnership infrastructure financing, and has a legal background. She has worked as a State Attorney and obtained her Bachelor of Law in Tanzania and her Masters of Law from the University of Cape Town.

What are the best ways to facilitate and promote Tanzania as a destination for FDI?

Stability in the economic and political sphere is absolutely critical, especially where investments are of a long-term nature. Predictability arises from economic and political stability, and Tanzania is very fortunate in this respect. We subscribe to a number of international arrangements and agreements that enable us to comply with standards that attract the right type of FDI, and we will continue to do this. Preferential treatment is important because it provides direct benefits downstream. However, our membership in international trading blocs, such as the East African Community (EAC) and the Southern Africa Development Community (SADC), is also important. This also contributes to making Tanzania a lucrative business address by creating trade and investment opportunities. We are also strategically located, and serve as a corridor to the inland regions, which will bode well in terms of maintaining our commercial competitiveness.

What issues should investors be aware of when coming to Tanzania?

I think it is important to familiarize yourself with the regulatory and legal framework of the country first. The relevant laws include the Investment Act 1997, the Mining Act 1998, the Export Processing Zones Act 2002, the Anti-dumping Act 2003, and the New Income Tax Act 2004. We are developing sector-specific guides, and have a section in our investment guide that explains everything of most importance that you need to know before arrival. One thing we find is that investors can struggle in terms of knowing which door to knock on first in order to kick-start their projects. Regardless of the nature and type of investment, TIC is always a preferred first point of call for investors, whom we gladly serve. We try to simplify information and make it available in the public domain for easy access. We encourage investors, and also have a hungry, burgeoning private sector that is willing to take risks. Our advice to foreign investors is to try to partner with the best local institutions to establish a footprint in the country and better understand the risks inherent in our system. They will know how to tackle them.

What is the investment outlook for power generation in Tanzania?

It is positive because there is a lack of generating capacity. Successful promotion of investment in Tanzania's power generation capacity has the potential to eliminate the current power shortage and reduce high costs incurred by industry and consumers. Over the long term, Tanzania has the potential to become a power exporter to the region. Tanzania has ample resources for power generation, but lacks the infrastructure necessary to harness them: hydro, gas, coal, oil and biofuels. A number of projects using these resources to solve short- and long-term needs have already been identified under the “Big Results Now" initiative. We have worked very closely with the Ministry of Energy and Minerals, to facilitate the arrival of private investment in the power sector. We are trying to clear the way for us to be able to take them through our legal processes and get the necessary incentives to enable them begin their operations. Another area of significant appetite is the development of fertilizers. There is huge demand from the market and our role as TIC is to fast track the process and work with the various government agencies to provide individuals access to feed stock, as well as land to set up their plants. A sense of urgency has been created, and with President Barack Obama's recent visit and his pledge for the “Power Africa" project, we retained that sense of urgency and perhaps created more. We are working hard to align ourselves, and are ready to support more investment in that area.