As Tanzania and Oman solidify their economic cooperation, the recent Oman-Tanzania Business Forum 2024, marks a new chapter in business and investment growth for both nations, with Zanzibar positioned as a prime destination for Omani capital. This forum, held at the Sheraton Hotel in Muscat on September 27-30 2024, was part of Tanzania’s official diplomatic mission to Oman.
The event put into light a strong commitment to widening prospects of bilateral trade and investment, with particular emphasis on the special economic potentials of Zanzibar.
The Business Forum brought together high-ranking officials, business leaders, and investors from both countries to promote dialogue on how to leverage the current economic ties and find new paths of cooperation.
From Zanzibar, the mission included the Minister of State, Presidents’ Office-Labour, Economic Affairs and Investment Hon. Sharif A. Sharif, Minister of Finance and Planning, Hon. Saada Mkuya Salum, and Minister of Trade and Industrial Development, Hon. Omar Said Shaaban. Tanzania Mainland was represented by Hon. Stanslaus Haroon Nyongo Deputy Minister, President’s Office-Planning and Investment.
The forum which involved 300 participants from government institutions, public and private sector of Tanzania, is one sure step toward increasing Foreign Direct Investment (FDI), especially from Oman, whose trade history with the coastline of East Africa dates back centuries.
Zanzibar as the gateway to investment in East Africa
This is one of the key highlights of Zanzibar’s position as a focal point for Omani investment. Suffice it to say that the island is full of rich cultural heritage, strategically located, and further boosted by the tourism industry and new strategies to make it investment hub, making it an unmatched investment opportunity for tapping East Africa’s growing markets.
Addressing the forum, Zanzibar’s Minister of Labor, Economic Affairs, and Investment Hon. Shariff Ali Shariff described the island as “a gateway to African and international markets” urging Omani investors to explore its vast potential.
“Zanzibar is not only a historic partner of Oman, but also a future economic powerhouse,” Minister Shariff said. He explained that the Revolutionary Government of Zanzibar has been striving to create an environment that is friendly to investors, through policies that encourage foreign capital and ensure sustainable development.
“We introduced a new Investment Act that enhances investor protection and gives greater incentives, which include tax exemptions, long-term land leases, and flexible employment laws,” he added.
One of the key takeaways of this forum was the rising potential of tourism in Zanzibar, which has become a core of the island’s economy. With over 700 hotels and Abeid Amani Karume International Airport (AAKIA) capacity to handle 1.9 million passengers yearly, Zanzibar is emerging as the elite destination for premium eco-friendly investment hub.
The government has been focusing on sustainable investment that minimizes environmental impact and maximizes economic returns, thus becoming an attractive investment opportunity for international investors.
Investment opportunities
The efforts to attract more foreign investments by Zanzibar are anchored in establishing Special Economic Zones, which offer a myriad of benefits to investors.
An overview of the investment landscape on the island was presented by the Executive Director of the Zanzibar Investment Promotion Authority (ZIPA), Mr. Saleh Saad Mohamed. He expressed that the total registered projects in Zanzibar are at 66% FDI and added that on the list of investors, the first place is taken by Omani investors.
To date, Oman has so far invested in 27 projects in Zanzibar, valued at over $1.14 billion. These have created some 1,600 direct jobs, especially in the tourism and hospitality sectors, as well as other fields like manufacturing, real estate, and agriculture.
Mr. Mohamed underscored the fact that besides tourism, Zanzibar’s diversified economy had several emerging opportunities for investment in areas such as aquaculture, renewable energy, logistics, and agro-processing. The other promising area is the Blue Economy of Zanzibar which focuses on sustainable fisheries, marine transportation, and aquaculture.
Earlier Minister Shariff also pointed to the island’s huge untapped potential in fisheries – in many ways, relating to stock management and cold chain logistics. “We have the opportunity for investors engaging in sustainable fisheries, where one secures environmental protection for decades into the future while offering jobs and export interests,” he said.
Tourism and Trade Rising
The main achievements of the forum were to strengthen trade and tourism cooperation between Tanzania and Oman. The event was based on a continuing increase in the exportation of goods and products from Tanzania to Oman during the two years between 2022-2023 up by 11.74%.
During the same time, the number of Omani visitors rose by 44.49% coming into Tanzania compared to the past. While the countries posted an increase in trade and tourist activities, a call has been made for the reviving of Foreign Direct Investment from Oman to Tanzania which shows a downfall to 31.9% in the year 2022.
Tanzania’s Ambassador to Oman, Ambassador Fatma Mohamed Rajab encouraged Omani investors to seek opportunities in mining, real estate, agriculture, and manufacturing sectors, adding that they are relatively virgin.
She added that the government of Tanzania is committed to creating a better investment climate through reform features to reduce red tape and enhance ease of doing business, among others.
Oman’s Minister of Trade, Industry, and Investment Promotion, Qais bin Mohammed Al Yousuf, also came to speak before the forum where he recalled the “special connection” between Oman and Tanzania, especially Zanzibar.
He noted that Tanzanian firms registered in Oman increased by 23.8% over the last two years, while investments were growing at 13.5% during the same period. On this regard, he said, it indicates a great potential area where more and more economic engagement is possible between the two countries.
Removing Investment Barriers
While the forum was largely focused on the investment potential of Zanzibar and Tanzania as a whole, it also addressed some of the challenges investors face when engaging with these markets.
Members of the Tanzanian Diaspora living in Oman had complained of bureaucratic and financial constraints imposed on their investments back home.
The diaspora representatives demanded less time-consuming avenues for them to strike heavy investment deals in Tanzania. “We have to create a better investment climate for our diaspora to contribute to the nation’s development,” noted Suleyman Yussuf, Chairman of the Tanzania Diaspora in Oman, TADIO.
During the said Business Forum 2024, seven MoUs were signed in various sectors, including construction, real estate, agriculture, ICT, renewable energy, and consulting services.
The implementation of the MoUs signed by Tanzania and Oman to promote more economic cooperation will facilitate the fulfillment of the aspirations of Tanzania’s top leaders, President Dr. Samia Suluhu Hassan and President of Zanzibar, Dr. Hussein Mwinyi who visited Oman in the year in 2022 and 2024 respectively.
Diplomatic success
In all, the Tanzania-Oman mission was a success in itself, for it having laid the foundations for a leading role by the two countries to continue in major sectors that include but are not limited to investment, tourism, and employment.
This mission also reasserted the leading role of the diaspora of Tanzania as an economic driver for the country and the commitment of the government to engage its citizens abroad. Among these, discussions on how to reduce bureaucratic barriers to investment, tax rates, and improved employment conditions for Tanzanians in Oman were very important.
Indeed, addressing the above issues may trigger an increase in diaspora investments that will contribute to economic growth in Tanzania.
The Ambassador Rajab’s call for the implementation of the existing MoUs between Tanzania and Oman was indicative of the mission commitment to turning agreements into real economic benefits.
If more trade and tourism have been evident between the two countries in recent years, then that indeed is a potential for more cooperation between the two countries.
Equally fundamental was the fact that Tanzanian officials brought back from Oman several lessons that they applied to improve the investment climate of Tanzania. Through shared experiences by Oman, Tanzania can do something to create an atmosphere where domestic and foreign investors find the environment much more conducive for doing business.
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