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0 The Government of Tanzania (GOT) generally has a favorable attitude toward foreign direct investment (FDI) and has had considerable success in attracting FDI. In 2012, FDI into Tanzania rose to over USD 1.1 billion, the highest in East Africa. The legacy of socialist policies endures in certain sectors, however, and some officials remain suspicious of foreign investors and free competition. There are no laws or regulations that limit or prohibit foreign investment, participation, or control, and firms generally do not restrict foreign participation.
Agriculture
Agriculture has been destroyed by both internal and external factors. However, the revival of the sector can provide European companies with a number of primary products desirable by their citizens and the world over. This is essentially coffee, cotton, tea, cashew nuts, cocoa, vanilla. These products account for about 48 percent of Tanzania’s GDP, provide 65 percent of total export earnings, and are by far the largest employer. The sector’s annual growth rate declined from 4% in 1999 to 3% in 2000 as a result of low short and main rainfall seasons, pests, and inadequate availability and distribution of inputs.
In addition, the revival of agriculture is the only way to fill the pockets of the majority of Tanzanians and hence increasing their purchasing power and demand for imported goods.
The introduction of the free-market economy in 1985 has had a positive effect on the sector through the introduction of semi-mechanized methods and new technologies especially in such sub-sectors as cut-flower and agro-processing industries. The growth of other sub-sectors, e.g., agricultural equipment, farm implements, agricultural inputs etc.is still characterized by import dependence. Investment in mechanized and intensive agriculture has not born fruits due to the non-implementation of land law reforms that are expected to go hand in hand with the open economy. However, the government is in the final stage of submitting the land law reform bill to Parliament this year. It is expected that such reforms will attract more investors in agriculture.
