News Column

We Need to Get Ready for U.S. Investments

August 11, 2014

AMERICA has announced investment pledges totalling more than17 billion US dollars at the US-Africa leaders summit that ended last week in Washington, DC.

In what is billed as a historical occasion where the US President Barack Obama host more than 40 African leaders to strengthen the ties between America and Africa, US, African companies and the World Bank pledged new investment in construction, energy and information technology projects in Africa.

President Obama said the US was determined to be a partner in Africa's success, "A good partner, an equal partner and a partner for the long term" and urged African leaders to create conditions to support foreign investment and growth. The summit held after President Obama made an extended trip to Africa last year, gives a hint that America is now taking Africa seriously.

African leaders said they were optimistic of becoming full partners in a relationship worth an estimated 85 billion dollars a year in trade flows. President Jakaya Kikwete said Africa wanted to move away from a relationship of "aid donor and aid recipient" to one of investment and trade.

He told the forum that with Obama and senior officials encouraging the business community "to take Africa seriously, I think this time we will make it." Yet it could be easy to be skeptical about the pledge and simply take it as another belated efforts by Americans to increase their foothold in the continent.

America is trying to catch up with China and other major powers in exploiting Africa's natural resources. But African countries will have to compete for that US investments.

Only some stand to benefit and Tanzania will not necessarily be the one simply because it has discovered enormous natural gas resources in Lindi and Mtwara. It is a fact that Tanzania is more resource-rich than its East African Community (EAC) partners.

It is endowed with vast natural gas deposits, besides substantial quantities of gold, diamond and tanzanite. It also has the region's biggest water and forest resources.

It is also true that the country is investing heavily to improve its road and railway infrastructure to make it a truly hub of trade in the East African region. We see various measures taken in a number of sectors to facilitate trade and investments. However, we feel that we have not done good enough in some areas. Reforming the business environment is not going as fast as it is expected.

Tanzania is leading in attracting Foreign Direct Investment in the region but we think we could do better. We should be able to compare with our equals outside the East African region by expediting reforms in the business environment so that we make the country the most attractive investment destination in Africa.

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Source: AllAfrica

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