Dar es Salaam credited as a leading frontier in attracting African FDIs
Dar es Salaam, Tanzania’s capital has emerged as the second-best cities in attracting Foreign Direct Investment (FDI) in East Africa after Nairobi, according to a recently published UN report.
The report named ‘The states of African Cities 2003-2018’, jointly produced by UN-Habitat, African Development Bank, the School of Economic & Business Sciences and UK Aid – ranked Dar at position 14, amongst 42 cities in Africa.
Dar was recognised as receiving FDIs amounting to $3.4billion, with the natural resources sector accounting for largest recipient, at 34%. Other notable sectors include construction, geological exploration, development import & export trade and whole sale & retail trade. The report revealed that the vast majority of FDI tended to concentrate within countries that are experiencing large and expanding markets, portray greater purchasing power and where firms are uniting to achieve a higher return on investment and profits.
“FDI will concentrate where there is a large domestic market, well developed norms of trust, low levels of corruption, a strong obedience to the rule of law, availability of domestic credit, financial market development and systems of government were highly significant and positive in attracting FDI,” said experts that drafted the report. They further emphasised that these key aspects accounted for Dar’s current position of being able to attract significant FDI inflows.
Tanzania as a whole is also recognised as one of the fastest growing country’s in Africa, owing to its relative political stability, stable financial system and positioning itself as a logistics hub within the region. The report further states that African cities should strive to collaborate, in a bid to heighten the potential in attracting increase regional FDI inflows.
The report positions Cairo as the leading country in attracting FDI inflows in Africa, owing to its well developed infrastructure, road network, availability of skilled workers, a conducive foreign investment environment and ease of doing business. Furthermore, collectively, Africa was placed as the second highest recipient of FDI, globally. In this vein, African governments have been urged to put more emphasise on the following key developmental issues, to enable them to further increase the level their FDI inflow: support sustainable urbanisation through the implementation of viable policies, progressive planning initiatives, and institutionalising robust financial and legal systems.
The main sources of FDI inflows were predominantly touted as originating from Paris, Tokyo, London, New York, Singapore, Seoul, Hong Kong, Chicago and Dubai.
Source: ASV & The Exchange.