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Tanzania suffers skilled labour shortage

Source: Daily Monitor – Tanzania has in four years, received nearly $2 billion in Foreign Direct Investment (FDI).
However, the shortage of skilled labour still limits its ability to lure Transnational corporations (TNCs), which currently dictate global FDI flows.

Last year alone, the country received FDI worth $470 million, about 39 times the inflows into the whole of Africa and less than one percent of the $648 billion globally.

“We cannot afford to continue to allow marginal FDI,” the acting chief of the Tanzania Investment Centre (TIC), Mr Emmanuel Ole Naiko, said recently before launching the World Investment Report (WIR) 2005 in Dar es Salaam.

Ole Naiko explained that the human capital issue is a problem that requires immediate redress in Tanzania. He said local skilled labour motivates TNCs to establish research and development (R&D) projects even in developing countries.

He also called for the need to build local entrepreneurial capacity that is required to organise, set-up and run modern industry. The two aspects and other factors, he noted, are the reasons why Africa remains the least recipient of FDI. The report shows that FDI flows into the continent have ranged between $9.6b in 2000 and $18.1b last year.

The WIR has adjusted the FDI inflows into Tanzania. As a result, the country has on average attracted $450m annually since 1999, compared to the $30m received in 1995. “The TNCs are the drivers of global R&D whose expenditure is increasing fast to the extent that it reached $677b in 2002,” he added.

Statistics he presented at the launch put the UK at the top of countries investing in Tanzania with 474 projects that have created 224,975 jobs. It is followed by India, Holland and South Africa, which together have created 14,674, 5691 and 13,011 jobs respectively. Next is Kenya with 190 projects that have employed 33,011 people.
The other major investors in the country are the US, China, Canada, Germany, Italy, Switzerland and Sweden.

Ole Naiko said compared to other regions, Africa had the lowest cross boarder investment. This mainly came from S.Africa, Botswana, Nigeria, Algeria, Egypt, Libya, Kenya, Mauritius and Morocco. He said S.Africa and India have been pointed out as the main sources of FDI to Tanzania. “S. Africa is the largest source of FDI to Africa.

Tanzania should not worry whether the investment comes from S.Africa, Kenya, USA, or UK as long as it is clean, respects our laws, increases our revenue and generates employment,” he said.

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