DAR ES SALAAM, one
of the mega cities in Africa has emerged as the second-best cities in
attracting Foreign Direct Investment (FDI) in East Africa after Nairobi, according
to the recently published UN report. The report named ‘The states of African
Cities 2003-2018’ jointly produced by UN-Habitat together with African
Development Bank with School of Economic and Business Sciences and UK Aid
ranked Dar at 14th among 42 cities on
the African continent.
Dar es Salaam
received FDIs amounting $3.4billion. The first
attracted largest recipients of FDI were resources sectors as accounting
for 34% of total FDI. Other sectors to receive FDI were construction,
geological exploration and development import and export trade as well as whole
sale and retail trade.
The report revealed
that FDI tend to relocate in countries with large and expanding market, with
greater purchasing power where firms are linking to obtain a higher return on
capital and investment profits.
“FID will locate
where there is domestic market size, well developed norms or trustworthy, low
level of corruption, rule of law, availability of domestic credit, financial
market development and presidential systems of government were highly
significant and positive is to attract FDI,” said the report
Experts believe
that Dar es Salaam has the potential to boost more FDI as it fits well within
the described characteristics. Tanzania is also one of the fastest growing Cities
in Africa and it enjoys political stability, stable
financial system and a logistics hub of the region.
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| The Askari Monument in Dar es Salaam City , Tanzania. |
The report further
says that African cities should find the best connections for their development
taking into account their country and city specific location advantages in
attracting public and private investments. This is due to the fact that
benefiting from economies of scale and association, African cities are becoming
the drivers of economic growth and productivity.
The report has
shown that Cairo holds the first place in Africa in terms of volume of FDI
attracted. The basic reasons include well developed infrastructure, road
network, an availability of skilled workers, a conducive foreign investment
environment and easy of doing business which makes it a desirable location for
investment.
The report also
pointed out that although Africa receives a modest share of global FDI, it has
the second highest investment growth rate when it compared to other world
regions. For that reason, African government needs to connect FDI attraction to
sustainable urbanization by developing it with strong national urban policies,
urban planning and financial and legal system. The main FDI sources are Paris,
Tokyo, London, New York, Singapore, Seoul, Hong Kong Chicago and Dubai.
The information
provided by the report is useful and encompasses many lessons for other regions
in the country to take over. Cities like new Capital Dodoma, Mwanza, Mbeya,
Tanga, and Arusha have the potentials and all it takes to bit down the leading
city. Potential investors are invited to explore investment opportunities in
our cities where the government continues to strive for adequate supportive
infrastructures to suit for various projects.
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